After another week of bitcoin price volatility, including a new all-time high, a new options record that would expire on March 26 could play a key role in price action and the continuation of this volatility in the next few days.
Options are a contract for the right to buy or sell an asset at a specific price. According to data analytics company Bybt, there are more than 100,000 BTC (the equivalent of $ 5,574,000,000 (given the bitcoin price of $ 55,740 at the time of writing this article)) of options that will expire this year. on Friday, March 26, in numerous large stock exchanges. This will make for an interesting negotiation session towards the weekend.
This level of options that will expire will set a new record, surpassing the $ 4 billion mark set in late January this year. The price of bitcoin on January 31 closed at just over $ 33,000, meaning bitcoin has appreciated almost 100% since it beat the previous record of options.
Open interest in options for Bitcoin has soared this year, more than doubling since late last year, from about $ 5 billion to about $ 14 billion. In the options, there are calls (bets that will increase the price) and there are offers (bets that will go down). Overall, the market remains bullish, with a current call-to-sell ratio at 1.11. Anything higher than one is bullish, meaning with a ratio of 1.18, the market leans 11 percent in favor of future advances.
Sell options appear to be in the $ 40,000 and $ 47,500 range, while call options that expire on Friday are set in the $ 60,000 range.
If the past is an indication of what is to come, this should lead to some short-term volatility, but ultimately more upside in the coming weeks after the expiration.
This is a guest message from William Clement III. The views expressed are wholly their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.