Bitcoin has not managed to close above 30,000 euros in the past 15 days. Measured from the beginning of the year, bitcoin is even down a good 37 percent. Although that seems like a significant loss, there are plenty of tech companies that will have it a lot harder in 2022.
That seems to have everything to do with the murky macroeconomic outlook we are currently battling. Global inflation is reaching a boiling point and central banks are doing everything they can to tame it with higher interest rates. Unfortunately, the higher interest rates are at the expense of the economy. After all, a higher interest rate means that financing becomes more expensive and that can put pressure on companies and individuals. As a result, assets have to be sold to pay the bills.
The open interest for the monthly option deadline set on May 27 in the bitcoin market is currently $1.81 billion (€1.7195 billion). The actual number is likely lower, as the bulls are particularly surprised by the 26 percent that the bitcoin price submitted in the past 30 days.
Bulls were surprised by Bitcoin declines
The call-to-put ratio of 1.31 reflects the 1.03 billion dollar (978.5 million euro) of open interest in call (buy) options against 785 million dollar (745.75 million euro) in put (sell) options. As it stands, 94 percent of call options are worthless on the May 27 expiration date.
If the bitcoin price remains below $31,000 (29,450 euros) on May 27, then only $60 million (57 million euros) in usable call options are available for the bulls. That is the case because there is no point in buying bitcoin at a price higher than its market value.
Bears can make a big profit on May 27th
A little miracle has to happen for the bulls to make it another festive month. The options expire tomorrow and the bitcoin price is currently strongly in favor of the bears.
If the price remains between 28,000 and 30,000 dollars, there are 800 contracts for the bulls that can be closed with a profit and 14,200 contracts for the bears. The net result is a profit for the bears of 390 million dollars (370.5 million euros).
If the price ends between 30,000 and 32,000 dollars, the bulls may activate 2,050 contracts with a positive result and the bears can activate 11,200 contracts. In net terms, the bears take 250 million dollars (237.5 million euros) in profit compared to the bulls.
If we shoot to somewhere between $32,000 and $33,000 tomorrow, the bulls will bag 5,650 contracts with gains and the bears 9,150 contracts. Even then, the bears end with a net profit of 110 million dollars (104.5 million euros) against the bulls.
To limit the loss, the bulls still have a lot of work to do in a short time. Even an 8 percent rally takes bitcoin to a level where the loss is around 100 million euros. It therefore seems that the bears can celebrate a party this week.
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