Cryptocurrency market is currently on an upward trend due to various factors. One of the important boosts for the market is related to the upcoming Bitcoin options expiry of March 31st, located at a current open interest of $4.2B. This comes off of a strong start to the year for Bitcoin, which is up over 70% thus far in 2021.

The increase in Bitcoin’s price has been attributed to a shift in sentiment from risk aversion to risk appetite. Namely, this was due to the U.S. Federal Reserve Chair Jerome Powell saying interest rate hikes may no longer be the default move to fight inflation. By adding $339 billion in liabilities within a two week period, the Fed made it clear that they are more focused on controlling the banking crisis, which may have severe implications for inflation.

At this upcoming expiry, Bitcoin bulls can potentially gain up to $1.4 billion in profits. This is seen in the current market composition, where the call-to-put ratio stands at 1.34. This means that the open interest for longs (calls) is $2.4 billion, while the open interest for shorts (puts) is $1.8 billion. The latter number is expected to significantly decrease if Bitcoin’s price holds near the $28,000 mark at expiration. This is because the right to sell Bitcoin at $26,000 or $27,000 will be useless if BTC trades above that level at expiry.

Given the current environment and the strengths of the bulls, the expected outcome of this expiry is likely to be favorable to Bitcoin buyers. While the resulting profits may be used to further support the $28,000 price range, this news will be rather discouraging for bears. However, it should also be noted that there are more approaches than simply holding on longs or shorts. A trader could have sold a call option prior to expiration, for instance, and that could result in a different outcome.

Overall, this expiry event could be the chance for Bitcoin bulls to greatly strengthen their positions, and possibly secure the previous all-time-high. It is important to note, however, that none of this should be taken as investment advice, and all readers should conduct their own research before any trading or investment decisions.



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