As Bitcoin options are about to expire, the long-short game has intensified, and Bitcoin market makers have entered a “panic mode.” On the 4th, a total of 15,530 Bitcoin option contracts on the market were about to expire, which meant that the value of open positions reached 575 million U.S. dollars. At present, the Bitcoin option longs are still affected by the May Bitcoin crash, which has caused most call option holders to still be in a substantial loss state.
Due to the crash, the number of active Bitcoins in circulation has still reached a 5-month low, and 45% of Bitcoins have not been traded in the past two years, which also means buying before the arrival of the bull market in 2019 Bitcoin investors do not want to sell at the current price.
In addition to investors, the number of bitcoins sold by mine owners also hit a 7-month low. After all, they are trying to avoid selling prices below $40,000.
At the same time, technical analysts said that Bitcoin is likely to fall to the 50-week moving average, with strong support near $34,000. It has been in a sideways trade recently, but overall it is in a downward flag shape. Before the expiration of the above-mentioned large number of option contracts tomorrow, the market is very likely to experience greater volatility.
Analysts pointed out that it is clear that the current market is in a wait-and-see state of long and short, everyone is grasping various signals, trying to determine future trends and trends.
Here comes the problem. Although the bears could have made a fortune from last month’s plunge, they are overconfident and bet a lot of put options for less than $32,000 per piece.
Therefore, although the initial situation was favorable for short positions from last month, most of the options currently on short positions are worthless.
In terms of breakdown, there are a total of 3080 contracts for call options with a value of more than 42,000 US dollars per piece, and a total of US$1.14 has not been liquidated; a total of 4,680 contracts for put put options with a value of less than US$ 32,000 per piece, or US$173 million The position has not been closed yet.
Analysts pointed out that in order to better judge the status of the long-short game, we also need to pay attention to the status of option contracts in the price range of 32,000-42,000 US dollars/unit.
Nevertheless, the “25% delta skew”, which represents Bitcoin’s fear and greed indicator, shows that market makers are currently in a “fear” state. When the premium of a put option is higher than that of a call option of similar risk, the indicator will turn to a positive value. This situation is usually considered a “fear” scenario, and the indicator is currently positive.
It is worth mentioning that since May 17, the indicator has repeatedly turned to the “fear” zone and reached a peak of 20%.
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