Over the past ten days, Bitcoin (BTC) price tested the $44,500 resistance on multiple occasions, and this marked a 16% drawdown from the previous week's $53,000 local top. Not even the $3.4 billion long futures contracts liquidations that occurred on Sept. vii while BTC dropped by 18.vii% was enough to eliminate bulls' optimism, co-ordinate to options markets information.

Bitcoin price at Coinbase in USD. Source: TradingView

If historical data plays any function in the price of Bitcoin, the month of September presented negative performances in 4 of the previous five years, and BTC finished August trading at $47,110.

Regardless of the price, adoption by institutional investors has been growing at a steady pace. On Sept. 13, Morgan Stanley, ane of the largest banks in the United States, appointed a lead cryptocurrency analyst for its dedicated cryptocurrency research team.

Only the well-nigh significant positive trigger for a 50% or college bull run comes from a potential exchange-traded fund (ETF) approval past the United States Securities and Substitution Committee (SEC). Fidelity Digital Assets, an investment arm of the $four.two trillion global fund manager, held a private meeting on Sept. 8 with several SEC officials to talk over the benefits and risks of a Bitcoin tradable product.

Allegiance filed for a Bitcoin ETP chosen the Wise Origin Bitcoin Trust in March 2022, but the regulator continues to procrastinate on issuing their terminal decision. Furthermore, over xx similar applications from other firms take been fabricated since and none have yet been; analyzed past the SEC.

Bitcoin options amass open involvement for Sept. 3. Source: Bybt.com

The Sept. 17 expiry will be a test of force for bears considering 88% of the $310 million put (sell) options accept been placed at $47,000 or lower. Consequently, if BTC trades above that price on Sept. 17, the neutral-to-bearish put option open interest gets cut to a meager $36 million.

A put option is a right to sell Bitcoin at a predetermined price on the set expiry date. Thus, a $45,000 put option becomes worthless if BTC trades above such price at 8:00 am UTC on Sept. 17.

The bulls apparent advantage is misleading

A broader view also gives bulls some reward every bit the phone call (purchase) options musical instrument'south total open up interest stands at $500 one thousand thousand, a 62% lead according to the call-to-put ratio.

However, this data is misleading because the bulls' excessive optimism could wipe out most of their bets. For example, if the Bitcoin decease price is beneath $47,000, their open interest is reduced to $34 million. After all, what expert is a right to larn Bitcoin at $52,000 if it's trading below that price?

Below are the four most probable scenarios that consider the current toll levels. The imbalance favoring either side represents the potential profit from the expiry. The data below shows how many contracts will be available on Friday, depending on the expiry toll.

  • Betwixt $45,000 and $46,000: 240 calls vs. 1,980 puts. The net consequence is $78 million favoring the protective put (bear) instruments.
  • Between $46,000 and $48,000: The net outcome is balanced between bears and bulls.
  • Between $48,000 and $50,000: 3,500 calls vs. 620 puts. The net result is $143 one thousand thousand favoring the call (balderdash) options.
  • Above $50,000: 4,150 calls vs. 260 puts. The net result is complete dominance of $195 one thousand thousand from bullish instruments.

This crude approximate considers phone call (purchase) options being exclusively used in bullish strategies and put (sell) options in neutral-to-bearish trades. Unfortunately, real life is not that elementary considering it'due south possible that more complex investment strategies accept been deployed.

Incentives are in place for bulls to try to break $l,000

Both buyers and sellers will show their strength on the hours preceding Fri's expiry, and the bears will endeavor to minimize the harm by keeping the price beneath $48,000. On the other hand, the bulls take decent command over the situation if BTC remains above such a level.

The highest stress level for bears is $50,000, where bulls take significant incentives to dominate the weekly death and country a decent $195 million advantage.

There's withal room for additional volatility ahead of Friday, and the bulls seem to exist better positioned.

The views and opinions expressed here are solely those of the author and practise not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should comport your own inquiry when making a decision.