Bitcoin's $ 6.1 billion options expiration was not enough to break bearish sentiment

Bitcoins ( BTC ) the price ranged between $ 46,000 and $ 52,000 for 26 days. Despite the significant expiration of the $ 6.1 billion nom...


Bitcoins (BTC) the price ranged between $ 46,000 and $ 52,000 for 26 days. Despite the significant expiration of the $ 6.1 billion nominal options at year end, the bullish and bearish instruments were balanced between $ 44,000 and $ 49,000.

Therefore, it was not surprising that the price of $ 47,175 at 0800 UTC on December 31 did little to change the price structure. Even the 3% rally to $ 48,500 after the event failed to hold up, signaling the bears are unwilling to give in.

Bitcoin / USD price on Coinbase. Source: TradingView

The bulls could have interpreted the 9,925 BTC leaving Coinbase in 24 hours as a positive trigger, as fewer coins are available on exchanges for newcomers. Additionally, the first week of the year has been a positive one for the past four years, averaging 18.5% gains for Bitcoin holders.

To further support the bulls thesis, the U.S.-listed tech company MicroStrategy added an additional 1,914 BTC to their balance sheet on December 30. On the negative side, regulation continues to put pressure on markets as South Korean exchanges require users to verify their third-party wallet addresses to comply with Financial Action Task Force (FATF) travel rules guidelines.

Bitcoin had a stellar 2021 anyway

Regardless of the short-term downtrend behind the 16% price drop in December, Bitcoin continues to outperform significantly US stocks and gold for the third consecutive year. Yet this performance was not sufficient to prevent every call option instrument of $ 48,000 and above from becoming worthless as the December 31 expiration price fell.

Bitcoin options pool interest open for December 31st. Source: Coinglass.com

At first glance, the $ 4.0 billion call (call) options significantly outperformed the $ 2.1 billion put (put) instrument, but the call-to-put ratio of 1.9 is misleading as the 16% drop in price from the November close of 57,000 erased most of the bullish bets. Therefore, the right to buy Bitcoin (call option) at $ 50,000 has no value if it is trading below that price.

Bullish and bearish instruments marketed evenly for the Bitcoin options expiration on December 31, which was much lower than expected at $ 660 million. Still, the bears couldn’t gain control as 85% of their bets were placed at $ 47,000 or less. Data like this is part of the reason why the December 31 expiration was followed by an attempt by the bulls to regain momentum.

Will the first week of 2022 finally be able to reverse the slightly negative sentiment that has prevailed since the crash of December 3? Unfortunately, according to the Bitcoin options markets, there is no indication that the tide has changed.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade move involves risk. You should do your own research before making a decision.



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Newsrust - US Top News: Bitcoin's $ 6.1 billion options expiration was not enough to break bearish sentiment
Bitcoin's $ 6.1 billion options expiration was not enough to break bearish sentiment
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