Key Points:
With the $20 billion monthly options expiry on Friday, Bitcoin bulls are committed to consolidating the $105,000 support level.
Bitcoin (BTC) traders are closely watching the $20 billion monthly options expiry scheduled for Friday (June 27). Despite Bitcoin's 1.5% decline over the past 30 days, those using options to hedge against downside risk are preparing for a more severe drop.
This recent price rebound may provide bulls with a critical opportunity to solidify the $105,000 support level, which could play a decisive role in driving Bitcoin to create new historical highs in the coming weeks.
Currently, the open interest for call options (buy) stands at $11.2 billion, while put options (sell) amount to $8.8 billion. Notably, $7.1 billion of the put options have a strike price of $101,000 or lower. Therefore, the advantage has clearly tilted towards bullish bets.
Analysts point out that Bitcoin's strong performance may stem from Federal Reserve Chairman Jerome Powell's more dovish stance. In his semiannual testimony to the House Financial Services Committee on Tuesday, Powell stated that "multiple paths are possible" regarding interest rates, including "earlier rate cuts" if inflation remains low.
According to Yahoo Finance, other Federal Reserve officials, including Governor Michelle Bowman and Chris Waller, have indicated that they expect rate cuts to begin as early as the Fed's July policy meeting, citing the latest data showing that inflation pressures have been contained. Meanwhile, the S&P 500 index has climbed to its highest level in over four months.
Bitcoin bulls view this stock market rally as an early signal that investors currently in short-term government bonds may soon shift to riskier assets in search of higher returns. This argument is further strengthened as analysts predict only a 5% growth in S&P 500 earnings by 2025.
Therefore, even if the central bank avoids expanding the monetary base in the short term, the decline in fixed-income instrument yields could still drive Bitcoin's upward momentum. As the options expiry approaches, the most effective bearish scenario would require higher uncertainty factors, such as a drop in hash rate or geopolitical instability, like escalating tensions in the Middle East.
Based on current price trends, analysts have proposed five possible market scenarios. These predictions estimate theoretical profits based on the imbalance of open contracts but do not include complex trading strategies, such as selling put options for upside price exposure.
Between $100,000 and $101,500: $1.74 billion in call options compared to $1.75 billion in put options, indicating a balanced market.
Between $101,500 and $102,500: $1.86 billion in call options compared to $1.62 billion in put options, with call options leading by $235 million.
Between $102,500 and $104,500: $1.93 billion in call options compared to $1.18 billion in put options, with call options leading by $750 million.
Between $104,500 and $106,000: $2.47 billion in call options compared to $1.06 billion in put options, with call options leading by $1.41 billion.
Between $106,000 and $108,000: $2.84 billion in call options compared to $750 million in put options, with call options leading by $2.1 billion.
Market analysis shows that for bears to minimize losses, they must suppress the Bitcoin price below $101,500 before Friday, which means a drop of 5% from the current level of $107,300. Conversely, if bulls can maintain the price above $106,000, it will significantly enhance their market position and pave the way for a rally in July, especially as spot Bitcoin exchange-traded funds (ETFs) continue to attract inflows.
Related: Japan proposes reclassifying cryptocurrencies to pave the way for ETFs and lower taxes
This article is for general reference only and should not be considered legal or investment advice. The views, thoughts, and opinions expressed in the text are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original article: “Bitcoin (BTC) Bulls Gain Edge, Targeting $110K Ahead of $20B Monthly Options Expiry”
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