The weekly Bitcoin (BTC) options expiration this Friday currently includes an open interest of $ 330 million. In light of the recent struggle to regain $ 32,000 support, this event is an important test of the cops’ willingness to show signs of reversal.
On July 21, Alameda Research announced that the company had made Bitcoin purchases under $ 30,000, and Sam Trabucco, the company’s quantitative trader, mentioned the narrative for BTC was due to ongoing fear, uncertainty, and doubt (FUD ) brought about by the Chinese BTC mining ban, grayscale GBTC unlock, and recovery in the stock markets.
The graph above shows that the current downtrend channel, initiated three weeks ago, could invalidate if price breaks the $ 32,200 resistance. The move seems to have been triggered by the statement by Elon Musk that his company SpaceX also holds Bitcoin.
During the July 21 meeting with Cathie Wood and Jack Dorsey, Musk said that despite the rumors, he completely opposes recent speculation that Tesla has sold part of its Bitcoin position.
Elon Musk clarifies that Tesla did not sell Bitcoin after triggering the sell-off https://t.co/jPxK5jBm3m pic.twitter.com/4uA5xB8OwB
– New York Post (@nypost) May 17, 2021
It’s worth noting that the rumors had some backing only because Musk was giving contradicting signals on social networks. In addition, Tesla had previously sold 10% of its Bitcoin holdings the previous month.
The $ 32,000 support is critical for bulls
Friday’s option expiration could be the first test of strength in this recent rebound. If bulls want to set a support level of $ 32,000, there is no better way than to inflict the greatest possible damage on neutral to bearish put options (put options).
The first signal that bears have tried to dominate is the put-to-call ratio. The value of 0.81 reflects a lower number of neutral to bullish call (buy) options for the July 23rd expiration date.
However, bears may have set themselves a trap as 96% of put options used $ 32,000 or lower strike prices. If Bitcoin manages to stay above this level at 8:00 a.m. UTC on Friday, only $ 8 million put options will participate in the expiry.
Connected: Bitcoin price hits $ 32,000, but derivatives metrics are still showing signs of weakness
On the other hand, there are call options valued at $ 29 million up to the strike price of $ 32,000. That $ 21 million difference favors bulls. Though small, it’s completely opposite to a $ 32,000 decline.
If $ 32,000 doesn’t hold, bears have a $ 9 million head start as only 9% of call options were placed at $ 31,000 or below.
None of the results are of extreme significance, but the gains could be used towards the larger upcoming monthly option expiration on July 30th. This is the main reason the bulls have to hold their ground to maintain current momentum.
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