According to cryptocurrency analyst Marcel Pechman, bulls are betting that Bitcoin (BTC) will rise above $ 60,000 by the option’s expiration in June. However, the analyst says professional investors will pay a heavy price for being wrong. We have prepared Marcel Pechman’s Bitcoin analysis and reviews for our readers.
Miners are selling, regulations are coming, BTC is struggling …
cryptocurrency.comAs follows, Bitcoin (BTC) tried to break out of the bearish trend last week. The first attempt on June 16 failed to break through the $ 22,600 resistance. The second try at $ 21,400 on June 21 was followed by an 8% price correction. After two failed breakouts, the price is now trading below $ 20,000. This raises doubts as to whether $ 17,600 is really a minimum.
The longer it takes BTC to break out of this bearish pattern, the stronger the resistance line becomes. Furthermore, traders closely follow the trend. This is exactly why it is important for the bulls to show strength during this week’s $ 2.25 billion monthly options expiration.
Christine Lagarde, head of the European Central Bank (ECB), expressed her belief that tighter scrutiny is needed. Subsequently, regulatory uncertainty continues to put pressure on the cryptocurrency markets. On June 20, Lagarde expressed her thoughts on the industry’s staking and lending activities.
Forcing Bitcoin miners to liquidate their BTC holdings is adding further negative pressure to the BTC price. Data from Arcane Research shows that public Bitcoin mining companies sold 100% of their BTC production in May. Collectively, the miners own 800,000 BTC. This raises concerns about a potential sale. The correction in the bitcoin price reduced the profitability of the miners as the cost of production occasionally exceeded their margins.
The June 24 option expiration will be of particular concern to investors. Because Bitcoin bears will make a $ 620 million profit by pressing BTC below $ 20,000.
The bulls place their Bitcoin bets at $ 40,000 and above
The open interest for the expiry of the options on June 24 is 2.25 billion dollars. However, the real figure will be much lower as the bulls are overly optimistic. These traders completely missed the target after BTC dipped below $ 28,000 on June 12th. But the bullish bets for the expiration of the monthly options exceeded $ 60,000.
The call-put ratio of 1.70 indicates the dominance of the $ 1.41 billion open call (buy) position over the $ 830 million put (sell) options. However, as Bitcoin remains below $ 20,000, most bullish bets will likely become worthless.
If Bitcoin’s price remains below $ 21,000 on June 24, only 2% of these call options will be available. This difference is due to the fact that the right to buy Bitcoin at $ 21,000 has no value if BTC is traded below this level on expiration.
Bitcoin bears have bulls on their horns
Below are the three most likely scenarios based on current price action. The number of Bitcoin options contracts available on June 24 for call (bullish) and put (bearish) instruments varies depending on the expiry price. The imbalance in favor of both parties constitutes the theoretical profit:
- Between $ 18,000 and $ 20,000: 500 calls and 33,100 puts. Net income supports put (bearish) instruments at $ 620 million.
- Between $ 20,000 and $ 22,000: 2,800 calls and 27.00 puts. The net result supports the $ 520 million bears.
- Between $ 22,000 and $ 24,000: 5,900 calls and 26,600 puts. The net result supports put (bearish) instruments at $ 480 million.
This rough estimate takes into account put options used in bearish bets and call options on neutral-bullish trades only. Even so, this oversimplification ignores more complex investment strategies. For example, a trader could sell a put option, actually buying Bitcoin above a certain price. Unfortunately, there is no easy way to predict this effect.
A few more drops below $ 20,000 wouldn’t be surprising for BTC.
Bitcoin bears must push the price below $ 20,000 on June 24 to make a profit of $ 620 million. The best-case scenario for the bulls, on the other hand, requires a pump of over $ 22,000 to reduce the impact of $ 140 million.
Bitcoin bulls held long leveraged positions of $ 500 million which were liquidated on June 12 and 13. Therefore, they must have less margin than is necessary to raise the price. Given this data, bears are more likely to resolve BTC below $ 22,000 before the June 24 options expiration.
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