A total of 106,000 bitcoin (BTC) futures contracts and options expire today, and this has made investors curious as to how the BTC price may react, after and after expiration.
The Beers did not expect the most recent run of $ 11,000, especially after two months of trading activity. The 52% increase in total open interest growth of bitcoin futures in July suggests that sellers are either overconfident or are mostly using it for hedge and arbitrage opportunities. .
Bitcoin futures collect open interest. Source: Skew
The above figures show that total futures open interest is more than $ 5.2 billion, just 3% shy of its historical high in mid-February. While this number may seem daunting, the truth today is less than $ 500 million.
Bitcoin options were a bit more worrying because the previous day’s 32% was $ 2.1 billion in total open interest. Unlike the futures market, there is not much benefit in rolling over options in the last trading days.
Option contracts are a winner that takes it all over the market, as those are considered useless under heavy water. As if there was $ 1.4 billion in open interest that did not end today, the big question is how fast / slow they are deployed.
Futures open interest after 18% gain
The average leverage usage on BitMEX is over 20x, meaning that a 10% move should be enough for 60% of traders due to insufficient margins covering their risk.
Bitcoin BTC perpetual liquidation. Source: Skew
The chart above indicated only $ 115 million in purchase liquids on July 27, despite a 12% price increase, indicating that those sellers had unusually high margins. This is actually a rapid indicator, as most of those prospective contract sellers tend to hedge.
Options market continues to boom
The options of bitcoin are open interest by expiry. Source: Skew
The Bitcoin option today has an open interest rate of $ 690 million, 60% of the remaining $ 1.4 billion as of August and September. More importantly, one must understand the effect on the put / call ratio. This metric provides an excellent gauge of the spirit of professional traders.
Bitcoin Option Put / Call Ratio. Source: Skew
According to the above chart, the put / call ratio was 63% on July 30 before expiration. This indicates that the option (recession) was 37% smaller than the open interest call options (bullish). Preliminary figures show that the indicator is currently at 69%. Despite being in a stable area, open interest for the rest of the calendar shows slightly less optimism.
The net end result will be the most neutral
Futures markets are inherently more balanced as shorts and shorts perform at all times. By monitoring recent continuous liquidation activity, one can infer that most vendors are fully hedged. Some $ 500 million expired today, and it is less than 10% of the total open interest.
Currently, BTC options are in favor of market bulls, and as noted earlier, the most recent bitcoin (BTC) price hike caught many bears.
Investors should closely monitor the 25% Delta Slant Indicator and Futures Contracts Contango, as previously reported by Cointeclap. Each of these indicators would indicate whether there is potentially extremely fast activity.
The views and opinions expressed here are entirely among them Author And do not necessarily reflect Cointegraff’s views. Every investment and trading step involves risk. You should do your research while making a decision.