Most Bitcoin (BTCTraders want to see a sharp price adjustment and a subsequent recovery rather than suffering for months below $ 24,000. But BTC has been doing the opposite since June 14, and the recent struggle is that assets haven’t surpassed the $ 22,000 resistance. For this reason, most traders hold back bullish expectations until BTC closes above $ 24,000 a day.
Non-crypto events are a major factor influencing investors’ view of digital assets, and on July 14, US Treasury Secretary Janet Yellen warned: Inflation is “unacceptably high”“And she Reinforcement Supporting Federal Reserve efforts. When Yellen was asked about the impact of rising interest rates on the economy, he recognized the risk of a recession.
On the same day, JPMorgan Chase reported a 28% year-on-year decline in profits, despite stable earnings. This difference is primarily due to the $ 1.1 billion allowance for doubtful accounts due to the “moderate deterioration” of the economic outlook.
The correlation between Bitcoin and the S & P 500 remains incredibly high, and investors fear that a potential crisis in the global financial sector will inevitably lead to a retest of the $ 17,600 low from June 18. I am.
The range of correlation metrics ranges from a negative 1 which means that the selected market moves in the opposite direction to a positive 1 which reflects a perfect and symmetric movement. The gap or lack of relationship between two assets is represented by 0.
The 30-day correlation between S & P 500 and Bitcoin is currently 0.87, which is the standard for the last four months.
Most bullish bets are over $ 21,000
It was surprising that Bitcoin did not exceed $ 22,000 on July 8th, as only 2% of the call (purchase) options on July 15th fell below $ 20,000. Therefore, Bitcoin bears are in a slightly better position against the $ 250 million weekly option expiration date.
A broader view using the 1.15 call-to-put ratio is to make a more bullish bet as the call (buy) open position is $ 134 million against the $ 116 million put (sell) option. is showing. Nonetheless, Bitcoin is currently below $ 21,000, so most bullish bets can be worthless.
If Bitcoin’s price remains below $ 21,000 at 8am UTC on July 15th, only $ 25 million worth of these call (purchase) options will be available. This difference occurs because if Bitcoin trades below that level at the time of expiration, the right to buy Bitcoin for $ 21,000 will not be used.
Bears can put $ 100 million in profits in their pockets
Below are the three most likely scenarios based on current price behavior. The number of option contracts available for Call (Bull) and Put (Bear) products on July 15 depends on the maturity price. Imbalances in favor of each side constitute a theoretical benefit.
- Between $ 18,000 and $ 19,000: 10 calls vs 5,200 puts. The end result is in favor of a $ 100 million bear.
- Between $ 19,000 and $ 20,000: 200 calls vs. 3,400 puts. The end result gives the bear a $ 60 million advantage.
- Between $ 20,000 and $ 21,000: 1,300 calls vs. 1,700 puts. The end result is a balance between bullish and bearish.
This rough estimate considers call options used for bullish betting and put options used only for neutral to bearish trading. Still, this oversimplification ignores more complex investment strategies.
Futures market shows bears are in a better position
Bitcoin Bear needs to keep its price below $ 19,000 on July 15th to secure a profit of $ 100 million. The Bulls best-case scenario, on the other hand, requires a push of over $ 20,000 to balance the scale.
The Lack of appetite from professional traders Bitcoin CME futures show that bulls are less likely to push prices up in the short term.
That said, the most likely scenario favors bears, and to secure the price of this Bitcoin, you need to trade for less than $ 21,000, which expires on the July 15th option.
The views and opinions expressed here are: author It does not necessarily reflect the views of Cointelegraph. All investment and transaction movements carry risks. When making a decision, you need to do your own research.