$2 billion worth of Bitcoin (BTC) options will expire on Fri, Aug. 27. Some analysts debate that a strong call (purchase) choice buying activeness on Sun was likely the goad for the recent $50,000 price test.

Digital asset trading firm QCP Uppercase mentioned in its market update that an entity has been "consistently pushing (option) prices higher 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 also mentions the exhaustion of regulatory concerns in the near term, as crypto-related decisions from the Senate Banking Committee and regulators are unlikely to bear fruit in 2022.

Bears might exist analyzing different data

However, the well-nigh contempo "The Calendar week On Concatenation" report from blockchain analytics provider Glassnode included some concerning data from Bitcoin on-chain activity. Such assay plant that the amount of entity-adjusted transactions has not responded to the ongoing bullish action.

Moreover, Decentrader, a crypto market-intelligence provider, highlighted insufficient trading volume during this recent move to push button BTC's price above $52,000.

Bitcoin options aggregate open up involvement for Aug. 27. Source: Bybt.com

Friday will exist an important test of the $50,000 level, as 4,372 BTC option contracts await the $218-million decision.

The initial call-to-put assay shows the vast potency of the neutral-to-bullish call instruments, with threescore% larger open up interest. Nevertheless, bulls might take been as well optimistic, as 68% of their bets have been placed at $50,000 or higher.

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

91% of the put options volition probably be worthless at expiry

On the other mitt, 91% of the protective put options take been placed at $46,000 or lower. Those neutral-to-surly instruments will become worthless if Bitcoin trades above that price on Friday. The options decease happens at 8:00 am UTC, so some additional volatility is expected ahead of the effect.

Beneath are the iv most probable scenarios, considering the current price levels. The imbalance favoring either side represents the potential turn a profit from the decease, because calls (buy) options are more frequently used in bullish strategies, whereas protective puts are used in neutral-to-bearish trades.

  • Below $45,000: four,040 calls vs. two,500 puts. The cyberspace result is a $69-meg advantage for the neutral-to-bullish instruments.
  • Above $46,000: half dozen,500 calls vs. 1,300 puts. The net effect 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.
  • In a higher place $50,000: 12,000 calls vs. 35 puts. The internet result is a $600-meg advantage for neutral-to-bullish instruments.

The above data shows how many contracts volition be available on Fri, depending on the decease price. There'southward no manner to measure the net event for every marketplace participant, equally some investors could be trading more complex strategies, including market-neutral ones using both calls and protective puts.

Those ii competing forces will testify their strength, equally bears will endeavor to minimize the damage. Either way, bulls have complete command of Fri's decease, and in that location seem to be enough incentives for them to defend the $48,000 level and fifty-fifty try a more meaning gain past pushing the price higher up $50,000.

Meanwhile, bears should concentrate on the September expiry, although keeping in mind that Republic of el salvador is expected to introduce Bitcoin every bit legal tender next calendar month. In improver, the country is building the infrastructure to support a state-issued Bitcoin wallet called Chivo.

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 adventure. You should bear your ain inquiry when making a decision.