Bitcoin bulls overtake the $40K barrier ahead of Friday’s $625M options expiry

Bitcoin bulls overtake the $40K barrier ahead of Friday’s $625M options expiry

Despite the recent breakouts to the $40,000 level, Bitcoin (BTC) price could still face downward pressure in August. The 42% rally in late July effectively inspired some optimistic short-term options bets but the initial data largely favors the neutral-to-bullish call options, and failure to sustain $40,000 has significantly reduced this advantage.

A good deal of the pressure is probably coming from the infrastructure proposal in the United States Senate. HR 3684 tightens rules on businesses handling cryptocurrencies and expands reporting requirements for brokers and this has had a knock on effect on the market’s bullish momentum. In addition to tightening regulations on crypto-oriented businesses, the backers of the bill believe they can find $28 billion in extra funding by expanding taxation on digital asset transactions.

Our top trading bots

These unexpected measures were added to the deal on July 28, following weeks of debate between the Republicans and Democrats and another bearish factor arose on July 27 when Micheal Hsu, the Acting Comptroller of the Currency, announced that regulators are investigating the commercial paper reserves backing Tether (USDT).

Bitcoin bulls overtake the $40K barrier ahead of Friday’s $625M options expiry
Bitcoin Aug. 6 options aggregate open interest. Source: Bybt

This Friday’s $625 million Bitcoin options expiry holds $400 million worth of the neutral-to-bullish call options stacked against $225 million in protective puts. Even though the initial analysis shows a landslide of a difference, 70% of the call options have been placed at $39,000 or higher.

Bulls can extend their lead to $162 million if the expiry price is above $40,000

Only $120 million in call options will take part in Friday's expiry if Bitcoin price holds below $39,000. On the other hand, $35 million of the neutral-to-bearish put options will be active and this results in an $85 million advantage for the bulls.

If Bitcoin happens to trade above the $39,000 threshold by the Aug. 6 expiry, the difference increases to $110 million. However, if bulls join forces to push the market above $40,000, the call options will outrun the protective puts by $162 million.

Related: This bullish Bitcoin options strategy targets $50K without risk of liquidation

There's still room for surprises, but bulls have the upper hand

Even though the options expiry occurs in less than 17 hours, Bitcoin's volatility leaves room for surprises. Bulls are the dominant force at play and they are likely to exert their strength to sustain prices above $38,000.

Considering that the threats coming from the U.S. Senate and Tether investigation probably won’t bear fruit in the short term, the odds of the bears making a comeback are quite slim.

After the expiry, bulls will likely use their profits to add positions for the upcoming weeks and this will further strengthen the current $37,500 support.

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.

Read on about Cointelegraph
Second Life creator returns to lay claim to the Metaverse
The founder of Linden Lab’s virtual online world Second Life Philip Rosedale will be rejoining the project as a strategic advisor to guide its entry to...
Cardano Climbs 11% In a Green Day
Investing.com - Cardano was trading at $1.7475 by 13:57 (18:57 GMT) on the Investing.com Index on Thursday, up 10.72% on the day. It was the largest one-day...
NFT collection's price takes a nosedive as creator's racist cartoons circulate
The Jungle Freaks nonfungible token (NFT) collection has lost roughly 80% of its trading value overnight after a series of racist cartoons drawn by one...
South Korean opposition set to tackle controversial crypto tax law
Lawmakers belonging to South Korea’s opposition People Power Party have prepared a fresh challenge to the planned crypto tax law.According to The Korea...
Bybit crypto exchange suspends services in South Korea
Bybit, one of the world’s top cryptocurrency derivatives exchanges, will halt some of its services to South Korean users ahead of a licensing deadline.The...
NFT company Recur reaches $333M valuation following Steve Cohen-backed fundraiser
NFT company Recur has seen its valuation swell to $333 million after concluding a successful investment round endorsed by billionaire Steve Cohen’s family...
Publishing platform Substack now accepts Bitcoin payments
An integration with payment processor OpenNode will allow content platform Substack to accept Bitcoin payments on-chain and using the Lightning Network.In...
Binance US ‘looking at IPO route’, CZ says
Binance US, a United States-based cryptocurrency exchange operating separately from Binance, is looking to go public despite the ongoing regulatory crackdown...
Payments in a flash: Strip club in Las Vegas now accepts Lightning
The Crazy Horse 3 gentlemen's club has announced it has become the first major entertainment venue in Las Vegas to accept Bitcoin using the Lightning Network.The...
Bitcoin price falls below $37K amid little hope of a definitive weekend bounce
Bitcoin (BTC) broke below $37,000 during trading on June 18 in the latest short-term bearish sign for hodlers.BTC/USD 1-hour candle chart (Bitstamp). Source:...
ConsenSys to develop private version of Kakao’s Klaytn blockchain
Ethereum software company ConsenSys has formed a technical partnership with Kakao’s Klaytn blockchain, with a view to developing a private platform for...
Nifty News: NFTs for Trump-haters, carbon offsets, fractionalized CryptoPunks and more
A group of anon uni students has come up with a way to hit former President Donald Trump where it hurts: by using his Tweets against him to raise money...
Marshall Islands digital currency would 'raise risks,' says IMF
A representative for the International Monetary Fund has said the Marshall Islands’ digital sovereign currency would currently pose a risk to the islands’...
Putin Approved Russians to Help Venezuela Launch Petro Behind the US Back: Report
The launch of Venezuela’s state cyber coin petro might not have been as innocent as the country’s socialist government portrayed it. Reportedly, the development...
The Developers Of The MonteCrypto Game Will Give One Bitcoin To The First Winner
The first player to play the new video game MonteCrypto: The Bitcoin Enigma will receive one bitcoin as a reward. The game is scheduled for release on...