Bitcoin has been strongly defending its $47,000. As we head into Friday’s expiry, here’s what traders need to do.
By Bhushan Akolkar
Updated
3 mins read
After Thursday’s correction, the broader market has recovered on a solid footing today. As of press time, the overall crypto market is up 6% moving back above $2 trillion.
The world’s largest cryptocurrency Bitcoin (BTC) also surged past $47,000 earlier today. However, at press time, Bitcoin is trading at $46,999 and has a market cap of $880 billion.
Bitcoin is having strong support at $44,000 as we are heading into Friday’s expiry. Thus, there’s little possibility that a $50,000 call option could be of any use. Besides, there are a total of 3,700 ultra-bullish call options contracts for above $50,000 levels.
The adjusted open interest for neutral to bullish call options stands at $190 million. An expiry under $48,000 levels will reduce the number to $138 million. However, the bears strike hard ahead in the day ad push BTC under $46,000 levels only $67 million of the total call options will be executable during Friday’s expiry.
The Bitcoin investor community is offering some unpleasant surprises to bears since 73% of the total protective put options are under $44,000 levels. However, if the Bitcoin expiry takes place above this level, the open interest for Bitcoin options will drop to $65 million.
By pushing the BTC price under $45,000, bears will virtually balance between call options and protective put options. An expiry above $46,000 will increase the chances of BTC bulls to $105 million. This provides a good enough reason for increased buying pressure ahead of Friday’s expiry.
Bitcoin has been showing a close correlation to the S&P 500 over the last month. However, this week’s correction on Wall Street has seen the S&P 500 coming under pressure. As on-chain data provider Santiment explains:
Over the past month, Bitcoin and the #SP500 have been correlating quite strongly, and that includes the mild decline over the past couple of days. Meanwhile, the inverse correlation between $BTC and #gold‘s price has calmed down significantly.
On the other hand, Bitcoin exchange flows have been dominating throughout the month of August. Another on-chain data provider Glassnode notes:
“Bitcoin exchange flows have returned to a dominance of outflows through August as investors withdraw $BTC. The market has transitioned through a number of phases of exchange flow dominance over the last year, with outflow dominance last seen in late 2020.”
Bitcoin has seen a strong rebound over the last few weeks. It has gained nearly 60% over the last month. If Bitcoin (BTC) continues with the current trend, we can see the levels of $50,000 very soon.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
