$2 billion worth of Bitcoin (BTC) options will expire on Friday, Aug. 27. Some analysts argue that a strong call (purchase) option buying activity on Dominicus was likely the catalyst for the contempo $50,000 price examination.

Digital asset trading business firm QCP Capital mentioned in its marketplace update that an entity has been "consistently pushing (selection) prices college in the last few weeks." The activity, which took place during the morning trading session in Asia, aggressively bought bullish options in chunks of 100-BTC contracts each.

The report likewise mentions the exhaustion of regulatory concerns in the near term, as crypto-related decisions from the Senate Cyberbanking Commission and regulators are unlikely to bear fruit in 2021.

Bears might be analyzing dissimilar data

However, the most recent "The Week On Chain" written report from blockchain analytics provider Glassnode included some concerning data from Bitcoin on-chain activity. Such assay found that the amount of entity-adjusted transactions has not responded to the ongoing bullish action.

Moreover, Decentrader, a crypto market-intelligence provider, highlighted bereft trading volume during this contempo motion to push BTC'south price above $52,000.

Bitcoin options amass open up interest for Aug. 27. Source: Bybt.com

Fri will exist an important test of the $fifty,000 level, as 4,372 BTC option contracts look the $218-1000000 decision.

The initial call-to-put analysis shows the vast dominance of the neutral-to-bullish call instruments, with 60% larger open interest. Nevertheless, bulls might have been as well optimistic, as 68% of their bets have been placed at $l,000 or higher.

Related: Bitcoin rejects $51K subsequently Michael Saylor reveals new BTC purchase — What's next?

91% of the put options will probably be worthless at decease

On the other hand, 91% of the protective put options have been placed at $46,000 or lower. Those neutral-to-surly instruments will become worthless if Bitcoin trades in a higher place that price on Friday. The options death happens at 8:00 am UTC, and so some additional volatility is expected ahead of the event.

Below are the four most likely scenarios, considering the current toll levels. The imbalance favoring either side represents the potential profit from the expiry, because calls (buy) options are more than frequently used in bullish strategies, whereas protective puts are used in neutral-to-surly trades.

  • Below $45,000: four,040 calls vs. two,500 puts. The internet result is a $69-million advantage for the neutral-to-bullish instruments.
  • Above $46,000: half-dozen,500 calls vs. ane,300 puts. The net result is $239 million favoring the neutral-to-bullish instruments.
  • Above $48,000: 7,400 calls vs. 420 puts. The net result is a $335-million advantage for neutral-to-bullish instruments.
  • Above $50,000: 12,000 calls vs. 35 puts. The net issue is a $600-million advantage for neutral-to-bullish instruments.

The to a higher place data shows how many contracts volition be available on Fri, depending on the expiry price. There'southward no way to measure the net result for every marketplace participant, as some investors could exist trading more circuitous strategies, including marketplace-neutral ones using both calls and protective puts.

Those two competing forces will show their force, as bears will attempt to minimize the damage. Either mode, bulls have complete control of Friday's expiry, and in that location seem to be enough incentives for them to defend the $48,000 level and even effort a more significant proceeds by pushing the price higher up $50,000.

Meanwhile, bears should concentrate on the September expiry, although keeping in mind that El Salvador is expected to introduce Bitcoin as legal tender side by side calendar month. In addition, the country is edifice the infrastructure to back up a state-issued Bitcoin wallet called Chivo.

The views and opinions expressed here are solely those of the author and do not necessarily reverberate the views of Cointelegraph. Every investment and trading move involves gamble. You should conduct your own enquiry when making a decision.