Key takeaways:
Over 90% of Bitcoin call options may expire worthless if the price fails to break above $71,000 by Friday.
Traders fear rising inflation and worsening credit conditions as the US and Israel-Iran war continues.
Bitcoin (BTC) has been stuck in a narrow range between $67,700 and $71,600 over the past week, closely following how the US stock markets reacted to the US and Israel-Iran war. Traders have high hopes that the upcoming $18.6 billion Bitcoin monthly options expiry on Friday could provide the bullish momentum needed to break above the $75,000 level for good.
S&P 500 futures (left) vs. Bitcoin/USD (right). Source: TradingView
The Bitcoin call (buy) options dominate March’s total open interest, totaling $11.2 billion, while put (sell) instruments stood 34% lower at $7.4 billion. However, this advantage means little given that Bitcoin has failed to sustain levels above $74,000 for the past seven weeks. Investors fear that inflation will remain a concern as WTI oil prices sustained levels above $90.
Economic uncertainty helps bears dominate the quarterly Bitcoin options expiry
Initial signs of cracks in the US economy emerged after private credit funds limited redemptions amid concerns of deteriorating loan quality. The $3 trillion sector has been under scrutiny after asset managers Ares Management, Apollo Global Management, Blue Owl Capital, and Cliffwater were forced to halt or restrict withdrawals in recent weeks, according to CNBC.
The uncertainty in the socio-economic scenario might be precisely what bears needed for Bitcoin’s quarterly expiry. To better assess the forces driving Bitcoin’s price ahead of Friday’s event at 8:00 am UTC, analysts are looking at what prices the call and put options were placed.
Deribit holds a clear lead with a 76% market share with $14.1 billion in open interest, followed by OKX with 7.1% and CME at 6.6%. Despite the greater demand for call options, Bitcoin bulls at Deribit were overconfident, placing the majority of their bets on $90,000 and higher levels.
Open interest for March 27 Bitcoin call options at Deribit, USD. Source: Deribit
Only $2 billion of the call…
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