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Our analysis of the situation
It’s Friday and the crypto world is buzzing with anticipation as $1.1 billion worth of Bitcoin options are set to unleash their destiny today. With approximately 18,000 Bitcoin options reaching their expiration, the burning question on everyone’s mind is, “What’s next?”
There's a lot of data to unpack. The put/call ratio of 0.64 indicates a possible influx of long contracts ready to expire, compared to shorter ones. This is intriguing, especially considering the surge in open interest for Bitcoin call options at striking prices of $70,000 and $100,000. It appears that the bulls have entrenched themselves in a position of power, holding nearly twice the open interest as the put options, showcasing an overall bullish sentiment.
This sentiment is further evidenced by trading firms noting a resurging demand for upward call options, with traders gearing up for higher strike calls set to expire in July and September. It seems like the crypto world is gearing up for quite the ride.
But, let’s not ignore the implied volatility (IV). We witnessed a slump in the crypto market over the last week, and while we’re experiencing a bit of relief with IV levels slightly below historical average, there’s caution in the air. It’s clear that May has historically not been the kindest month for the market, leading to suggestions to consider some monthly puts as a safety net.
In the last 24 hours, Bitcoin prices have escaped the clutches of the $61,000 level and are now hovering around the $63,000 mark. If they manage to surge past $64,000, we could be on the brink of a breakthrough, possibly paving the way for the long-anticipated $70,000 milestone.
As the clock ticks closer to the options expiration, the crypto world rests on the edge of its seat, ready to witness the unleashing of $1.1 billion worth of Bitcoin options.
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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Please, behave!