$ 1.1 billion in Bitcoin options gone! The short side has the advantage of locking in US $ 50,000.

Some Bitcoin bull markets are still licking the stock as Bitcoin prices fell 26.50% on December 4, from $ 57,000 to $ 42,000. Because of this crash, there is $ 850 million left in Long Bitcoin. It was liquid, but more importantly, the drop was causing fear and anger to its lowest level since July 21.

The two comparisons are slightly different, as Bitcoin cost less than $ 30,000 on July 21, and it reverses all gains this year. The December 4 low of $ 42,000 is still up 44% this year. By comparison, the S&P 500 is up 21% this year and West Texas crude oil prices are up 41%.

Bulls can now focus on the level of Bitcoin placed on the cryptocurrency exchange, which has continued to decline and has fallen to its lowest level in three years. According to data from CryptoQuant, there are currently less than 2.27 million bitcoins on the market, with fewer and fewer transactions. It is an event that excites many investors.

At the same time, there are options worth up to $ 1.1 billion that expire on Friday. It has a clear balance of appeal and provision of options. With Bitcoin stabilizing above $ 50,000 USD, the bears were ready for more. .

In terms of the buy-to-sell ratio, Bitcoin's uptrend had an edge of around 7% when it hit 1.07, as $ 555 million was worth over $ 520 million. However, even this 1.07 indicator may be wrong. This is why the 11.5% drop in prices last week made most long-term betting options unnecessary.

For example, if the price of Bitcoin falls below $ 52,000 on December 10 at 8:00 a.m. (4:00 p.m. Beijing time), only $ 50 million of those profits can be satisfied. This is because if a trader bets on buying Bitcoin with an option of $ 55,000, the currency will be cheaper when the contract expires and the market will be worthless.

Here are our three best scenarios for what would happen at the current price: The options to buy and sell contracts that expire on December 10 are determined based on the Bitcoin price during the month. Time flies, and all that is. you want is the theoretical advantage.

Between US $ 47,000 and US $ 50,000: 400 call options and 6,600 call options. Profits are $ 300 million at approved suppliers.

US $ 50,000 to US $ 54,000: 1,700 auctions and 4,700 sold. Profit was $ 160 million on sellers' approval.

Over $ 54,000: 2,400 calls and 2,900 calls. The profits are $ 30 million by consensus of the sellers.

This rough estimate assumes that the call option is appropriate for long term betting and the option is used for short term business. However, this oversimplifies many complex investment strategies.

For example, a trader can sell a good call, which is a return on Bitcoin above a certain price. However, this is difficult to predict.

The short term wants Bitcoin below $ 50,000.

Bitcoin bears must hold a currency value of less than $ 50,000 to be valued at $ 300 million. The Bulls, on the other hand, had to increase the currency's value by 7.2% from its current $ 50,500 to cut their losses in half.

Considering that the $ 2 billion leveraged long-term job will be phased out on December 4, many parties will want to be more secure and will now refuse to take new risks. For long-term investors, making short-term losses is a waste of energy.

So from these examples it is clear that short work will remain important until the week selection deadline expires.