Where the heck is bitcoin planning to go in the coming weeks? The number one cryptocurrency by market cap has decided to take a turn for the worse, diving into $55,000 territory after trading for $58,000 or $59,000 for the past several days, and it looks like many analysts are torn on whether the world’s primary digital asset will continue to go south or get back to its winning ways.
Bitcoin Has Dug Itself Into a Hole
It appears one of the big contributing factors to bitcoin’s price dip is that many bitcoin futures options expired earlier in the week. Worth approximately 100,000 BTC in total, this is considerably more than the other major expiration that took place in January of this year. Typically, whenever an expiration of this magnitude occurs, bitcoin takes a bit of a hit. We’ve seen it time and time again.
While at first things may appear dismal on paper, not everyone is convinced that things are about to be handed off to the bears. Pankaj Balani – chief executive of the Delta bitcoin exchange in Singapore – stated in a recent interview:
The expiry data suggests a bullish outlook.
He’s basing this on the fact that with his trading platform, there is now more interest in betting on bitcoin’s price moving up rather than into southern territory. Balani continues with:
There is a higher open interest build up on puts than on calls, as options writers remain more comfortable selling the downside than writing the upside. On the downside, the highest buildup is on $40,000 strike, which puts for the March expiry. $40,000 also remains the most sold strike for the June expiry and for longer maturities… $40,000 has become a strong psychological level for traders, as this is the level at which bitcoin took a big leg up post the news of Elon Musk’s $1.5 billion buying. Though a lot of this open interest has rolled over, a significant size is still open with only one week left for expiry. This opens a slight volatility risk for the market. If the premium on futures shrinks, then we can see unwinding of the carry trade which can increase short term volatility for bitcoin into the expiry.
Some Are Starting to Like It…
There is other good news in that previous doubters of bitcoin are suddenly beginning to see the asset in an entirely new light. Jordan Belfort – the notorious “Wolf of Wall Street” and the subject of a 2013 biographical film starring Leonardo DiCaprio – was a known bitcoin hater, as in 2017, he was quick to dismiss it and claim that the currency would likely crash in dramatic fashion.
However, he’s recently emerged to explain that he was wrong about the world’s primary digital currency, and he’s confident it could reach a price of $100,000 before the end of the year.