• Bitcoin experienced a 43% surge in value between March 10 and March 20, catching options traders off guard.
• The $1.2 billion open interest set to expire on April 7 was mainly concentrated at prices above $28,000.
• On the expiry date, Bitcoin’s price remained at $27,800 resulting in a net profit of $60 million for bearish traders.
Bitcoin’s Recent Value Surge
Bitcoin’s value has experienced an astonishing 43% surge between March 10 and March 20, catching options traders off guard. Analysts attribute this spike in value partly to increased demand for commodities, as investors perceive risks in central banks‘ emergency funding programs. As liquidity injection increases, fears of inflationary pressure become more pronounced, with evidence suggesting that investors are hedging their bets accordingly.
Options Traders Concentrated Bets Above $29K
Only 14% of the $1.12 billion open interest set to expire on April 7 was placed at $28,000 or above. Bitcoin enthusiasts who were betting big on the cryptocurrency may have missed out on a lucrative opportunity to reap the rewards of increased demand for inflation protection. While Bitcoin bulls may have initially benefited from this surge in demand, some may have squandered their chances by placing excessively large bets on higher prices.
Bears Profit From BTC Trading Between $27-28K
According to reports, the weekly BTC options expiry had a whopping $1.2 billion in open interest but bullish investors focused their bets at prices above 29k dollars only which resulted that the outcome will be much lower than expected when BTC traded below that price level ($27-28K). This meant that traders who placed bearish bets made a profit of $60 million as Bitcoin’s price remained within this range on expiry date (April 7th 8 am UTC).
Fear and Greed Index Showing Greed In Market
The Fear and Greed Index shows a high level of greed in the market due to increased liquidity injection which is causing inflationary pressures and hence investors are trying to hedge their investments by buying commodities instead of cash/currency or other asset classes like stocks etc..
Conclusion
Overall it can be concluded that while some Bulls may have initially benefited from this surge in demand for Bitcoin but later squandered their chances by placing overly optimistic bets and Bears profited from such situation due to decreased number of available call option contracts near expiration date which resulted them with net profit of 60 Million Dollars overall .