After another week of bitcoin price volatility, including a new all-time high, a new record for options expiring on March 26 could play a key role in price action and the continuation of this volatility for days to come.
Options are a contract for the right to buy or sell an asset at a specified price. According to data analytics company Bybt, there are over 100,000 BTC, the equivalent of $ 5,574,000,000 (given bitcoin’s price of $ 55,740 at the time of writing this article), of options that will expire this Friday, March 26, on numerous exchanges important. This will create an interesting trading session before the weekend.
This level of expiring options will set a new record, breaking the $ 4 billion mark set at the end of January this year. The price of bitcoin on January 31 closed at just over $ 33,000, which means that bitcoin has appreciated almost 100 percent since the previous record for options expired.
Interest in open options for bitcoin has exploded this year, more than doubling since the end of last year, from around $ 5 billion to close to $ 14 billion. In options, there are call options (bets that the price will go up) and there are put options (bets that the price will go down). Overall, the market is leaning bullish, with a current buy-to-sell ratio of 1.11. Anything above one is bullish, which means that at a 1.18 ratio, the market is leaning 11 percent in favor of more advantages to come.
Put options appear to be targeting the $ 40,000 range and $ 47,500 range, while call options expiring on Friday are targeting the $ 60,000 range.
If the past is any indication of what is to come, this should imply some volatility in the short term, but ultimately more upside in the next few weeks after expiration.
This is a guest post from William Clemente III. The opinions expressed are entirely my own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.