Bitcoin (BTC) price is down this week, and naturally, bears will e'er observe some reversal signal whenever the price shows strength, such as the 8% gain on November. 28. Of course, technical analysis is non an exact science, and then there is a margin for interpretation and almost traders look at multiple timeframes to find a narrative that suits their bias.

Currently, BTC price is in a descending aqueduct that started on Oct. 31, and if this pattern plays out, Bitcoin could driblet to $fifty,000 in the short term.

Bitcoin/USD toll on FTX. Source: TradingView

Cryptocurrency markets crashed on November. 26 afterward concern over a new COVID-19 variant sparked a global market sell-off. As Bitcoin dipped below $54,000, bears saw a $215 million potential profit on Dec. iii's options decease, merely that changed afterwards BTC toll regained the $57,000 back up.

Furthermore, regulatory concerns coming from the United States continue to pressure the marketplace. On Nov. 24, the U.S. Senate Banking Commission chair sought information from stablecoin issuers and exchanges by December. 3.

In early November, the President'southward Working Group on Fiscal Markets released a report suggesting that stablecoin issuers in the The states should be subject to "appropriate federal oversight" like to that legislated for banks.

Fueled by the potential government interference and negative brusque-term consequences, Bitcoin bears are probable to profit $80 million on Dec. three options expiry.

Bitcoin options aggregate open interest for Dec. 3. Source: Coinglass.com

At commencement sight, the $460 million call (buy) options are evenly matched with the $485 million put (sell) instruments, but the 0.96 call-to-put ratio is deceptive because the 17% toll drib from $69,000 volition likely wipe out most of the bullish bets.

For instance, if Bitcoin's toll remains below $57,000 at 8:00 am UTC on Dec. 3, just $24 million worth of those call (buy) options will be bachelor at the expiry. Therefore, there is no value in the correct to buy Bitcoin at $60,000 if it is trading below that price.

Bears are comfortable with Bitcoin below $57,000

Listed below are the 4 most likely scenarios for the $950 1000000 Dec. 3 options expiry. The imbalance favoring each side represents the theoretical profit. In other words, depending on the expiry toll, the quantity of call (buy) and put (sell) contracts becoming agile varies:

  • Between $54,000 and $56,000: 290 calls vs. 3,480 puts. The net result is $175 meg favoring the put (bear) options.
  • Between $56,000 and $58,000: 750 calls vs. 2,160 puts. The cyberspace outcome is $80 million favoring the put (bear) instruments.
  • Between $58,000 and $sixty,000: 1,510 calls vs. 1,040 puts. The internet event is $30 million favoring the call (balderdash) options.
  • In a higher place $lx,000: ii,760 calls vs. 860 puts. The net outcome is $115 one thousand thousand favoring the call (bull) instruments.

This crude gauge considers telephone call options beingness used in bullish bets and put options exclusively in neutral-to-bearish trades. Nevertheless, this oversimplification disregards more complex investment strategies.

For example, a trader could take sold a put option, finer gaining a positive exposure to Bitcoin (BTC) above a specific price. Only, unfortunately, there's no easy style to estimate this event.

Bulls need $58,000 or college to balance the scales

The but way for bulls to avert a loss on December. 3'south expiry is by pushing Bitcoin's toll above $58,000, which is 2% abroad from the current $56,900. Even so, if the current short-term negative sentiment prevails, bears could exert some pressure level and try to score upwards to $175 1000000 in profit if Bitcoin cost stays below $56,000.

Currently, options markets data slightly favor the put (sell) options, thus creating opportunities for additional FUD and surprise marketplace crashes.

The views and opinions expressed here are solely those of the writer and practice not necessarily reflect the views of Cointelegraph. Every investment and trading motility involves chance. You should conduct your own inquiry when making a decision.