Two or three weeks agone, when Bitcoin (BTC) was trading below $52,000, a trader betting on $65,000 by Oct. 22 would have been considered extremely optimistic. The fact that 98% of the put (sell) options for Bitcoin'south weekly options death on Oct. 22 has been placed beneath that price proves that this is truthful.

Fast forward to this week, and the successful launch of the first BTC commutation-traded fund (ETF) in the Usa and news that Digital Currency Group (DCG), the parent company of the Grayscale Bitcoin Trust, increased its limit to acquire up to $1 billion worth of GBTC shares, boosted Bitcoin price to new all-time highs.

The $forty.5 billion investment vehicle has been bachelor for trading on U.s. markets since March 2022, and information technology recently filed a request to the The states Securities and Exchange Commission (SEC) to catechumen its GBTC product to an ETF.

Bitcoin price on Coinbase in USD. Source: TradingView

The parabolic motion to the $67,000 all-time high on Oct. 20 has also been fueled by billionaire investor Carl Icahn's bullish remarks. With four decades of splendid returns, Icahn warned of an impending financial crisis and highlighted Bitcoin'due south strength as an inflationary hedge.

Furthermore, Vasiliy Shpak, Russia's deputy minister of Industry and Merchandise, reportedly filed a proposal to utilise the country'south oil exploration gas product to ability cryptocurrency mining. The Russian government has attempted to reduce gas flaring to cut emissions only has struggled to meet targets due to its underdeveloped infrastructure.

Even though Oct. 22's $1.8 billion options decease is a landslide victory for bulls, information technology wasn't like that a couple of weeks agone.

Bitcoin options aggregate open interest for Oct. 15. Source: Bybt

At first sight, the $one billion call (buy) options dominate Oct. 22 expiry past a mere 23% compared to the $810 meg puts (sell) instruments.

Nevertheless, the ane.23 phone call-to-put ratio is deceptive considering the recent rally will likely wipe out most of the bearish bets if Bitcoin's cost remains to a higher place $64,000 at viii:00 am UTC on Oct. 22. There is no value on a right to sell Bitcoin at $60,000 if it'southward trading above that price.

Bulls seem pretty comfortable above $65,000

Below are the 4 most likely scenarios for the October. 22 expiry. The imbalance favoring either side represents the theoretical profit. In other words, depending on the expiry price, the quantity of telephone call (buy) and put (sell) contracts becoming active varies:

  • Between $lx,000 and $62,000: 8,670 calls vs. three,070 puts. The net effect is $335 1000000 favoring the call (bull) instruments.
  • Between $62,000 and $64,000: 10,780 calls vs. 2,100 puts. The cyberspace result is $540 million favoring the call (bull) instruments.
  • Betwixt $64,000 and $66,000: 13,050 calls vs. 280 puts. The cyberspace result is $830 meg favoring the call (bull) instruments.
  • Above $68,000: thirteen,680 calls vs. 20 puts. The net consequence is consummate dominance, with bulls profiting $940 million.

This crude estimate considers telephone call options being used in bullish bets and put options exclusively in neutral-to-surly trades. However, this oversimplification disregards more than complex investment strategies.

For example, a trader could have sold a put pick, effectively gaining a positive exposure to Bitcoin in a higher place a specific price. But, unfortunately, there's no piece of cake way to estimate this effect.

Bears need a 7% cost correction to reduce their loss

In each of the scenarios drawn above, bulls accept absolute control of Oct. 22'southward death. This week's positive newsflow leaves little reason for investors to take profit or take a price correction ahead of the expiry. On the other hand, bears demand a 7% move below $62,000 to avert an $830 million loss.

Traders must consider that during bull runs, the corporeality of effort a seller needs to pressure level the toll is immense and usually ineffective. Currently, options markets information point to a considerable advantage from call (buy) options, fueling fifty-fifty more bullish bets for the monthly death on October. 29.

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 movement involves risk. You lot should acquit your own research when making a decision.