Bitcoin Derivatives Suggest Bears to Take Lead As Options Expire

Sahaj  |  May 21, 2021

Recently released derivatives data suggests that the bears are positioned to take the lead as $930M in Bitcoin options expire Friday. As revealed in the data, $930M worth of Bitcoin (BTC) weekly options will be expiring on May 21 at 8:00 AM UTC, but the recent market crash may have provided bears with too much power.

Bears may have the Upper hand in Options Expiry, Bitcoin Derivatives Data Suggests

The leader Deribit, as usual, holds a 90% share, but the recent market crash has given bears real strength. While the traders and analysts struggle to find a rationale for the 53% drop from the $64,900 ATH, David Lifchitz, the CIO of ExoAlpha explained the recent market conditions perfectly by releasing a statement that said:

“This looks like the final flush-out after the last couple of months of an irrational bull run, shitcoin frenzy, and other antics.”

The correction was so intense that even avid Bitcoin defenders flipped, including the global CIO of the investment giant Guggenheim, who dubbed crypto markets as tulipmania.

Well, regardless of all the reasons that were behind the price movement, the traders that held previously low-priced rights to sell Bitcoin at the level of $45K-$46K are now enjoying.

Also, traders should not fall for what seems like a balanced situation as the 30% drop in the price of Bitcoin has shifted the balance to favor bears over the past two weeks.

Right to Acquire BTC is Effectively Worthless 

There is not much gain in rolling over a losing position to the following week, unlike futures contracts. Hence a right to acquire Bitcoin at the level of $50K is effectively worthless right now as we are nearing the expiry date.

In addition to this, it is necessary to highlight that the monthly options usually handle most of the action and May 28 is not going to be any different with around $1.95 billion open interest.

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