The Bitcoin options trading volume on the CME has been consistently above $ 7 million for the last 3 months. In fact, the figure in question has even exceeded $ 30 million quite a few times in the past 30 days.
This constant trading volume is an indication of constant institutional interest and investment in trading. And because the volume of transactions has been consistently high since August 31, the next Option expiration on September 25 may turn out to be a no-event, a wet squib, if such interest continues to hold.
The Put-Call ratio, for example, was 0.70 for open interest yesterday. While a trader would read this chart and notice bearish sentiment across the board, a contrary would read it and conclude that a dip is close and that recovery is closer than that.
The opposite angle here is the result of prevailing market conditions that are unique in nature. Institutions like MicroStrategy are betting heavily on Bitcoin. In fact, so important is his bet that Bitcoin is now his reserve asset, with $ 500 million invested in the cryptocurrency, straight from the company’s balance sheet. The same is evident from the fact that open interest for Bitcoin options has increased over the past two weeks.
The opposite view applies here as the entry of Bitcoin to exchanges has been stifled lately. The usual increase in supply and lack of demand are no longer the case. Instead, the supply has decreased while the demand in the market has not fallen proportionally.
In fact, the supply on cash exchanges has fallen to its lowest point in a month. There are not enough traders liquidating positions or transferring their Bitcoin to sell. Even if there is an instantaneous drop in prices due to options expiration, the recovery will be quick, especially if supply continues to fall.
The current expiration of Options may appear to be a significant event on the charts. However, the impact may be different than anticipated. All said and done, it can turn out to be a smokescreen. If a drop in price on spot exchanges after Options expire, it may not be as significant and the recovery may be faster.
This is a machine translation of our English version.
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