Here's why $16.5K is critical for November's $1.14B Bitcoin options expiry

Bitcoin (BTC) faced a 7.3% driblet betwixt Nov. 20-21 arsenic it tested the $15,500 support. While the correction seems small, the question has caused $230 cardinal successful liquidations successful futures contracts. Consequently, bulls utilizing leverage came retired ill-prepared for the $1.14 cardinal monthly options expiry connected Nov. 25.

Bitcoin investors' sentiment worsened aft Genesis Trading, which is portion of the Digital Currency Group (DCG) conglomerate, halted payouts astatine its crypto lending arm connected Nov. 16. More importantly, DCG owns the money absorption institution Grayscale, which is liable for the largest organization Bitcoin concern vehicle, the Grayscale Bitcoin Trust (GBTC).

Additionally, Bitcoin miner Core Scientific has warned of "substantial doubt" astir its continued operations implicit the adjacent 12 months fixed its fiscal uncertainty. In its quarterly study filed with the United States Securities and Exchange Commission (SEC) connected Nov. 22, the steadfast reported a nett nonaccomplishment of $434.8 cardinal inthe 3rd 4th of 2022.

Meanwhile, New York Attorney General Letitia James addressed a missive to the members of U.S. Congress connected Nov. 22 recommending barring the acquisition of cryptocurrencies utilizing funds successful IRAs and defined publication plans specified arsenic 401(k) and 457 plans.

Despite bulls' champion efforts, Bitcoin has not been capable to station a regular adjacent supra $17,000 since Nov. 11. This question explains wherefore the $1.14 cardinal Bitcoin monthly options expiry connected Nov. 25 could payment bears contempt the 6% rally from the $15,500 bottom.

Most bullish bets are supra $18,000

Bitcoin's steep 27.4% correction aft failing to interruption the $21,500 absorption connected Nov. 5 amazed bulls due to the fact that lone 17% of the telephone (buy) options for the monthly expiry person been placed beneath $18,000. Thus, bears are amended positioned adjacent though they placed less bets.

Bitcoin options aggregate unfastened involvement for Nov. 25. Source: CoinGlass

A broader presumption utilizing the 1.14 call-to-put ratio shows much bullish bets due to the fact that the telephone (buy) unfastened involvement stands astatine $610 cardinal against the $530 cardinal enactment (sell) options. Nevertheless, arsenic Bitcoin is down 20% successful November, astir bullish bets volition apt go worthless.

For instance, if Bitcoin's terms remains beneath $17,000 astatine 8:00 americium UTC connected Nov. 25, lone $53 cardinal worthy of these telephone (buy) options volition beryllium available. This quality happens due to the fact that determination is nary usage successful the close to bargain Bitcoin supra $17,000 if it trades beneath that level connected expiry.

Bears could unafraid a $245 cardinal profit

Below are the 4 astir apt scenarios based connected the existent terms action. The fig of options contracts disposable connected Nov. 25 for telephone (bull) and enactment (bear) instruments varies, depending connected the expiry price. The imbalance favoring each broadside constitutes the theoretical profit:

• Between $15,000 and $16,000: 200 calls vs. 16,000 puts. The nett effect favors bears by $245 million.
• Between $16,000 and $17,000: 3,200 calls vs. 11,900 puts. The nett effect favors bears by $145 million.
• Between $17,000 and $18,000: 5,600 calls vs. 8,800 puts. Bears stay successful control, profiting $55 million.
• Between $18,000 and $18,500: 9,100 calls vs. 6,500 puts. The nett effect favors bulls by $50 million.

Related: BTC terms holds $16K arsenic expert says Bitcoin fundamentals ‘unchanged’

This crude estimation considers the telephone options utilized successful bullish bets and the enactment options exclusively successful neutral-to-bearish trades. Even so, this oversimplification disregards much analyzable concern strategies.

Bitcoin bulls request to propulsion the terms supra $18,000 connected Nov. 25 to flip the tables and debar a imaginable $245 cardinal loss. However, Bitcoin bulls precocious had $230 cardinal worthy of liquidated leveraged agelong futures positions, truthful they are little inclined to propulsion the terms higher successful the abbreviated term. With that said, the astir probable script for Nov. 15 is the $15,000-to-$17,000 scope providing a decent triumph for bears.

The views, thoughts and opinions expressed present are the authors’ unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.