Key results:

• 97% of $ 8.3 billion in Bitcoin puts options worthless at USD 102,000.

• A compact coverage above USD 105,000 can cause a Bitcoin price rally to up-to-date ups.

Bitcoin (BTC) increased above USD 101,000 on May 8, reaching the highest level for over three months. 4.6% Daily Escalate in BTC prices caused $ 205 million to liquidate the Futures position and eroded the value of almost every PUT option (sale). Traders now ask if Bitcoin is ready to break their highest level of USD 109 354 in the near future.

The aggregate Bitcoin Put option (sale) Open interest for the next three months is $ 8.3 billion, but 97% of them were placed below USD 101,000 and will probably expire worthless. This does not mean, however, that each Put Trader option bet on minus Bitcoin, because some could sell these instruments and derived benefits from benefits.

Among the largest strategies of options traded in Delibit is “Bull’s spread, which consists in selling PUT options, while buying another PUT at a lower price, limiting both the maximum risk of profit and the risk of drops. For example, a salesman aimed at enjoying the benefits of higher prices can sell $ 100,000 and buy USD 95,000.

Cryptocurrency traders are known for its exaggerated optimism, which is reflected in the leading strategies on the markets of the Deribit option, such as “Spread Call Call” and “Spread by the diagonal bull”. In both cases, traders predict that Bitcoin prices are equal or higher than commercial options.

$ 100,000 Bitcoin increases stubborn options, but shorts can resist

If Bitcoin maintains the level of 100,000 USD, most strategies will bring positive results in the expiry of the options in May and June, which gives traders additional incentives to support the rush up. It is possible, however, that sellers (shorts) using Futures contract markets have their influence to prevent the new Bitcoin height.

Related: Coinbase can be purchased by the Deribit trading platform for USD 2.9 billion

The total open interest on Bitcoin Futures is currently $ 69 billion, which indicates significant demand for short (sale) positions. At the same time, higher prices can force Bears to close their position. However, this effect of “compact cover” is significantly muted in fully secured positions, which means that traders are not particularly sensitive to bitcoin prices.

For example, you can buy Bitcoin point items using marginal funds or sellers at the place of sale (ETF), while selling equivalent at BTC Futures. This strategy, known as “wearing trade”, is a neutral delta, so profit appears regardless of price fluctuations, because the monthly trade in Futures Bitcoin with a bonus to compensate for a longer settlement period.

Bitcoin Futures Premium was below 8% in the last three months, so the incentives to “transfer trade” have been limited. Therefore, it is likely that there will be a form of “compact cover” if bitcoins increase above USD 105,000, which significantly improves the chances of the new highest level of all time in the next few months.

This article is used for general information purposes and should not be and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are themselves and do not necessarily reflect or represent the views and opinions of Cointelegraph.