Bitcoin traders and investors are searching to indicate what might move the market as a record near $6 billion worth of bitcoin options is set to expire on March 26.
Boosted Market Cap, Dwindling Rally
Bitcoin is racing past a trillion-dollar market cap, reaching an elusive milestone and opening the door for new opportunities. Bitcoin returned to near its all-time high with a price of roughly $57,500 on Monday morning. The figure comes after a week of steady price levels over $54K. However, at the time of writing, BTC continues to trade sideways around the $54,000 range.
Bitcoin options contracts that permit investors to buy or sell the cryptocurrency at a specified price within a set period are valued at around 100,000 bitcoin or almost $6 billion at today’s prices.
This will expire on Friday, according to data from cryptocurrency analytics provider Bybt. The future options expiry is significantly more than the previous record of $4 billion, set in late January.
Bitcoin has traded relatively horizontally for a couple of weeks being at roughly $49K at the beginning of March, reaching a peak of $61K on March 14.
The same day, Binance CEO Changpeng Zhao (aka CZ) wrote that he was not sure about everyone, but he got used to $60k already. Moreover, he asked why bitcoin was going sideways.
According to Pankaj Balani, the chief executive of the Singapore-based Delta bitcoin and cryptocurrency exchange, the expiry data suggests a bullish outlook.
Trading data indicates that speculators are feeling optimistic about bitcoin ahead of the record expiry. There is additional open interest in “call options” at the moment (bets that the bitcoin price will climb up) than in “puts” (bets the price will drop).
However, there are several indications that Bitcoin hodlers are not keen to sell their coins anytime soon. This could indicate that BTC’s price is not due for a significant drop soon.
According to reports, Bitcoin is facing a severe liquidity crisis as the whales are not moving their digital assets; only 36% of Bitcoin’s supply has progressed over the past six months.
Bitcoin’s emerging record options expiry could flare price volatility, as previous large expiries have caught investor attention. The size of the bitcoin open interest market has soared recently, more than doubling since last summer.
Advocates believe that the world’s biggest cryptocurrency by market value will continue its remarkable run as growing numbers of institutional investors become involved and could act as a hedge against inflation, which many investors expect to rise.
Market analyst Joseph Young wrote on Twitter that giant Bitcoin whales are presently holding onto their coins while small whales are selling, with the caveat that 1,000 to 10,000 BTC whales could be exchanges. In conclusion, he asked investors which side they wanted to represent them.