According to Bijie.com, on March 27, Bitcoin options positions of up to 16.38 billion US dollars are about to undergo final liquidation. From the biggest pain point of options being locked at $75,000, to the risk of a large area of ​​bullish contracts returning to zero, both bulls and shorts have clear chips in this critical game. As of press time, the latest price of Bitcoin68959Dollar, will the bulls fight back next, or will the bears wave their butcher's knife?

Table: Bitcoin market core data as of March 27

Bitcoin Bulls’ False Exuberance and Shorts’ Advantage

Bitcoin book prosperity and short profit

Dismantling Deribit's latest data will reveal that the bulls' situation is far more dangerous than the superficial numbers. In the context of the imminent expiration of $16.38 billion in Bitcoin options due this Friday, although the nominal size of the call options is as high as $11.2 billion, which looks dominant, as much as 77% of the exercise prices are concentrated above $78,000.

Let’s make a simple deduction: if the settlement price finally falls near US$71,000, then more than 90% (92%) of the bullish contracts will be reduced to waste paper – this is a typical dilemma of “book prosperity but actual zero”. Looking at the short side, a tight defensive system has been built in the key range of $65,000 to $75,000. In just the narrow range of $69,001 to $72,000, the net advantage of put options is as high as $950 million.

Sentiment Indicators for the Bitcoin Options Market

Looking at the sentiment indicators in the options market, as of press time, the Bitcoin put/call ratio is currently around 0.59 to 0.62, which is below 1.0 on the surface and seems to still be biased towards the bullish side. But we discovered a key detail: Although call options account for about 58% of the open interest, the trading volume of put options within 24 hours has increased significantly, and the put/call trading ratio even reached 1.20 in some periods. what does that mean? Existing funds are still betting on the upside, but incremental funds have begun to pose downside risks. We can’t help but ask: Can the momentum of the bulls really sustain this decisive battle?

Bitcoin put/call ratio is around 0.59 to 0.62

Bitcoin’s Biggest Pain Point: $75,000

The current price of Bitcoin's biggest pain point in the market is locked at $75,000 - the settlement price at which option buyers lose the most and sellers (market makers) make the most profit at expiration. As of press time, the price of Bitcoin is US$70,500, which is lower than the pain point of US$75,000, which means that call option buyers’ contracts above 75,000 face a greater risk of zeroing, and put option buyers’ contracts below 75,000 also face losses.

Bitcoin’s biggest pain point price locked at $75,000

We speculate on the price trend before expiration. There is a high probability that the market will move closer to $75,000 before expiration in order to maximize the seller's profit and minimize the seller's delivery obligation. In addition, the impact on the current Bitcoin price is that the price has the momentum to repair upward to around $75,000, but whether it can stand firm depends on the acceptance of buying orders and the game of short-term funds.

Macro Resonance: When Liquidity Turning Point Hits Geographical Risks

Macro triple pressure: strengthening short logic

Let's look at the macro environment. There are three pressures here that are adding to the logic of short sellers. First, WTI crude oil prices continue to fluctuate at high levels around $90, exacerbating market concerns about stubborn inflation and suppressing expectations that the Federal Reserve will turn to easing. Secondly, although there was a short diplomatic window in the US-Iran conflict, contradictory signals emerged frequently, and geopolitical uncertainty forced funds to withdraw from risky assets. Bitcoin is even regarded by institutions (such as Coinlore) as a real-time global risk assessment tool, and it can respond to macro changes faster than traditional markets. The third most deadly pressure comes from the traditional financial sector: the US$3 trillion private credit market has shown signs of tight liquidity, and institutions such as Ares and Apollo have restricted redemptions, which often heralds a further tightening of systemic risk appetite.

Institutional differentiation and contradiction: Buying on the surface is actually defensive

Looking at institutional behavior, there are deeper divisions hidden behind the surface data, which just exposes the fragility of the market. We sorted out the flow of Bitcoin ETFs: net inflows were indeed recorded in March, but they fell sharply by 73% from February, and were highly concentrated in IBIT, a product. This means that the breadth of funds is narrowing, and institutions are not bullish across the board.

Bitcoin ETF flows on March 26

What deserves our attention more is the subtle signals of the Bitcoin derivatives market. Digging deeper into the structure of Bitcoin trading volume: In the past 24 hours, the volume of put options traded reached 24,600, and the call options traded 20,500. The put/call transaction ratio has climbed to 1.20. This shows that existing funds are still betting on the upside, but incremental funds have begun to buy put options on a large scale for downside protection. We call this a "price rebound coupled with protective buying" structure - and it clearly tells us that market participants are deeply skeptical about the sustainability of the upside.

Conclusion: Bits from magnetic attraction effect to trend selection

Different ranges of Bitcoin settlement prices will directly determine the final fate of both long and short parties. Based on our quantitative analysis, the Bitcoin settlement price falling above US$75,001 is the only chance for bulls to make a comeback, and the bulls will make a profit of approximately US$790 million. However, if the price is suppressed in the range of $72,000 to $75,000, the short sellers will still maintain a net advantage of about $430 million; once it falls below $69,000, the short sellers will win and the liquidity support of $65,000 will be tested below. This means that bulls would have to push prices up more than 6% from current levels to avoid the trap of a "false breakout."

The latest price of Bitcoin on March 27 was $68,959

In our view, this $16.38 billion Bitcoin options delivery means that the power of hedging to suppress volatility has subsided, and prices will no longer be "magnetically attracted" within a narrow range. At that point, Bitcoin will be re-exposed to macro catalysts. If the geopolitical situation eases and inflation expectations peak, the suppressed bullish forces may take the opportunity to launch an offensive; conversely, if credit risks continue to spread, the butcher knife of short sellers may trigger a new round of stampede. As of press time, Bitcoin is still struggling at the $70,000 mark. Whether it breaks through or not, the answer will be revealed soon.

The above content is about "The $16.38 billion Bitcoin options are about to expire: Is it a bullish breakthrough or a short butcher?" ‌‌‌‌‌‌" analysis, to learn about the latest price of Bitcoin, please pay attention to Bijie.com.

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