Bitcoin’s $6.1 billion options expiry was not enough to break the bearish sentiment

Bitcoin’s
(BTC)
price
has
been
ranging
between
$46,000
and
$52,000
for
26
days.
Despite
the
large
nominal
$6.1
billion
year-end
options
expiry,
the
bullish
and
bearish
instruments
were
evenly
balanced
between
$44,000
and
$49,000.

Therefore,
it
was
no
surprise
that
the
$47,175
price
at
8:00
am
UTC
on
Dec.
31
brought
little
change
to
the
price
structure.
Even
the
3%
rally
to
$48,500
following
the
event
failed
to
sustain
itself,
signaling
that
bears
are
unwilling
to
cede
their
upper
hand.


Bitcoin/USD
price
on
Coinbase.
Source:
TradingView

Bulls
might
have
interpreted
the

9,925
BTC
leaving
Coinbase

in
24
hours
as
a
positive
trigger,
considering
fewer
coins
are
available
on
exchanges
for
newcomers.
Besides,
the
first
week
of
the
year
has
been
positive
for
the
past
four
years,
averaging
18.5%
gains
for
Bitcoin
holders.

To
further
support
bulls’
thesis,
the
United
States
listed
tech
company

MicroStrategy
added
another
1,914
BTC

to
their
balance
sheet
on
Dec.
30.
On
the
negative
side,
regulation
continues
to
pressure
the
markets
as

South
Korean
exchanges

require
users
to
verify
their
third-party
wallet
addresses
to
comply
with
the
Financial
Action
Task
Force
(FATF)
travel
rule
guidelines.

Bitcoin
had
a
stellar
2021
anyway

Regardless
of
the
short-term
bearishness
behind
December’s
16%
price
drop,

Bitcoin
continues
to
vastly
outperform

both
U.S.
stocks
and
gold
for
the
third
year
in
a
row.
Yet,
that
performance
was
not
enough
to
avoid
every
$48,000
and
higher
call
(buy)
option
instrument
becoming
worthless
as
the
Dec.
31
expiry
price
came
in
lower.


Bitcoin
options
aggregate
open
interest
for
Dec.
31.
Source:
Coinglass.com

At
first
sight,
the
$4.0
billion
call
(buy)
options
vastly
outperformed
the
$2.1
billion
put
(sell)
instruments,
but
the
1.9
call-to-put
ratio
is
deceptive
because
the
16%
price
drop
from
Nov.’s
$57,000
close
wiped
out
most
of
the
bullish
bets.
Therefore,
there
is
no
value
in
the
right
to
buy
Bitcoin
(call
option)
at
$50,000
if
it
is
trading
below
that
price.

Bulls
and
bears
instruments
were
evenly
marched
for
the
Dec.
31
Bitcoin
options
expiry,
which
came
in
much
smaller
than
expected
at
$660
million.
Yet,
bears
were
unable
to
take
control
as
85%
of
their
bets
have
been
placed
at
$47,000
or
below.
Such
data
partially
explains
why
the
Dec.
31
expiry
was
followed
by
an
attempt
from
bulls
to
regain
momentum.

Will
the
first
week
of
2022
finally
be
able
to
revert
the
slightly
negative
sentiment
that
has
prevailed
since
the
Dec.
3
crash?
Unfortunately,
according
to
Bitcoin
options
markets,
there
is
no
indication
that
the
tide
has
changed.


The
views
and
opinions
expressed
here
are
solely
those
of
the



author


and
do
not
necessarily
reflect
the
views
of
Cointelegraph.
Every
investment
and
trading
move
involves
risk.
You
should
conduct
your
own
research
when
making
a
decision.

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