Bitcoin Bulls Saving Their Energy For $40K

The price of bitcoin is no longer in sight of $40,000. However, evidence suggests that bulls are ready to accept a few short-term losses to enhance their next push at the major barrier level. Bitcoin (BTC) bulls have had a difficult time in recent months, but they are not alone. The Federal Reserve of the United States has made repeated remarks implying that interest rates would rise in 2022. This prompted investors to seek security in inflation-protected bonds. The monetary authority has indicated that it intends to hike the benchmark interest rate significantly and progressively cease monthly debt asset purchases.

Bitcoin’s volatility is unaffected by the fact that some crypto investors regard its digital scarcity as inflationary protection. As a result, asset prices fluctuate in lockstep with risk markets. The accompanying chart compares the price of Bitcoin to smaller publicly traded corporations in the United States, as measured by the Russell 2000 equity markets index.

Bitcoin Latest Transactions

The Purpose Bitcoin ETF, established in Canada, attracted nearly $38 million worth of Bitcoin on Tuesday, its third-largest daily inflow to date, despite the negative performance. The fund currently has 31,032 BTC, or $1.2 billion, in its possession.

Regardless of investor mood, Bitcoin supporters might lose $120 million if the cryptocurrency price falls below $36,000 on Friday’s options expiration. A call option offers the buyer the right to acquire BTC at a certain price on February 4 at 8:00 a.m. UTC. The three most likely possibilities for Friday’s options expiration are below. The active number of call (buy) and put (sell) contracts vary based on the expiry price:

950 calls vs. 4,210 putts between $35,000 and $37,000. The net outcome favors the put (bear) instruments by $120 million.

1,650 calls vs. 3,300 puts between $37,000 and $38,000. The overall consequence is a $60 million advantage for bear instruments.

4,230 calls vs. 1,710 puts between $38,000 and $39,000. As a result, the call and put options are evenly distributed.

This rough estimate considers call options in bullish wagers and puts options in neutral-to-bearish transactions.