Bitcoin bears attempt to pin BTC price under $23K ahead of this month’s options expiry
Bitcoin's (BTC) 16% price gain between Feb. 13 and Feb. 16 practically extinguished the bears' expectation for a monthly options expiry below $21,500. As a result of the abrupt rally, these bearish bets are unlikely to pay off, especially since the expiry occurs on Feb. 24. However, bulls were not counting on the strong price rejection at $25,200 on Feb. 21 and this reduces their odds of securing a $480 million profit in this month’s BTC options expiry.
Bitcoin investors' primary concern is a stricter monetary policy as the U.S. Federal Reserve (FED) increases interest rates and reduces its $8 trillion balance sheet. Feb. 22 minutes from the latest Federal Open Market Committee's (FOMC) meeting showed that members were in consensus on the most recent 25 bps rate hike and that the FED is willing to continue raising rates as long as deemed necessary.
St. Louis FED President James Bullard told CNBC on Feb. 22 that a more aggressive interest rate hike would give them a better chance to contain inflation. Bullard said,
If confirmed, the increased interest rate pace would be negative for risk assets, including Bitcoin, as it draws more profitability for fixed-income investments.
Even if the newsflow remains negative, bulls still can profit up to $480 million in Friday's monthly options expiry. However, bears can still significantly improve their situation by pushing the BTC price below $23,000.
The open interest for the Feb. 24 monthly options expiry is $1.91 billion, but the actual figure will be lower since bears expected prices below $23,000. Nevertheless, these traders were surprised as Bitcoin gained 13.5% between Feb. 15 and Feb. 16.
The 1.55 call-to-put ratio reflects the imbalance between the $1.16 billion call (buy) open
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