With $ 1.1 billion in Bitcoin options expiring on Friday, Longs could face even bigger losses

Bitcoin bulls (BTC) did not recover from the damage last week, with the value of BTC rising from $ 57,000 to $ 42,000. The huge loss of 26.5% impacted the contract to buy 850 million BTC in the future. But more importantly, he raised the fear and tragedy index to its lowest level since July 21.

Comparing these two cases is incredible, because on July 21, a figure below $ 30,000 will offset BTC's annual revenue in 2021. BTC, on the other hand, is still up 44% from $ 42,000 on December 4. until now this year. By comparison, in 2021, the S&P 500 was up 21% and WTI oil prices were up 41%.

Bulls are still bearish and might worry about maintaining the bitcoin exchange, which is currently at its lowest level in three years. According to data from CryptoQuant, there are currently less than 2.27 million bitcoins stored on the exchange, and a decline in the exchange rate has led investors to refuse to sell them in the short term. This is considered the best by many investors.

While there is a clear balance between call (call) and offer (put) options at a $ 1.1 billion expiration date on Friday, the short-term position would be better if Bitcoin stabilizes at a level slightly above $ 50,000.

Overall, as a call to compare, Bitcoin's uptrend shows a slight 7% advantage. This is because the $ 555 million call (buy) option is greater than the $ 520 million offer (put) option. However, the 1.07 indicator is false as most calls are worthless due to the 11.5% price drop last week.

For example, if Bitcoin is still below $ 52,000 at 8:00 a.m. UTC on December 10, then the call (buy) option is worth up to $ 50 million. This happens because the right to buy Bitcoin for $ 55,000 is not worth it if the Bitcoin exchange rate is lower than the above price.

Photo shows the bulls will face a big loss

Here are three of the most common events based on current rates: As of December 10, the actual number of calls and offer options will depend on the value of BTC during the expiration period. As a rule, inconsistencies in the agreement on one side give advantages.

Between US $ 47,000 and US $ 50,000: 400 calls from 6,600 deposits, net worth indicates that the short-term position has a net worth of US $ 300 million.

Between $ 50,000 and $ 54,000: 1,700 call options against 4,700 offer options. Net worth shows that short-term employment has a net worth of $ 160 million.

Over $ 54,000: 2,400 call options versus 2,900 call options. Net worth indicates that the short term position has a net worth of $ 30 million.

This rough estimate takes into account the call options used to bet on the upside and provides specific trading options for the trading medium. However, this oversimplification ignores many complex investment strategies.

For example, by selling call options, traders can gain a negative edge over Bitcoin at a certain price. Unfortunately, there is no easy way to predict this outcome.

Shorts will do everything possible to reduce the cost to less than $ 50,000.

The BTC Air Force will also have to make some effort to lower the cost from $ 50,000 to raise $ 300 million.

The Bulls, on the other hand, had to increase their value 7.2% from their current $ 50,500 to cut their losses in half.

Considering our deletion of our leveraged $ 2 billion long position on Dec. 4, the bulls appear to be adding risk and are reluctant to opt for the situation. wasting energy to recover from these brief losses would be inappropriate behavior.

So, in this case, the decline appears to remain significant even though the current policy cycle expires.