Bitcoin (BTC) bulls are nonetheless licking their wounds from the bloody Dec. 4 correction, which noticed the value collapse from $57,000 all the best way to $42,000. This 26.5% draw back transfer prompted $850 million in lengthy BTC futures contracts to be liquidated, however extra importantly, it shifted the “Concern and Greed index” to its lowest degree since July 21.

It’s one way or the other unusual to match each occasions, because the July 21 sub-$30,000 low would have erased your entire positive aspects in 2021. In the meantime, the $42,000 low from Dec. 4 continues to be a 44% achieve year-to-date. Examine this towards the S&P 500, which is up 21% in 2021, and the WTI oil worth, which has accrued a 41% achieve.

Bulls may be centered on the Bitcoin reserves held at exchanges, which continues to descend and presently sits on the lowest degree in three years. In accordance with knowledge from CryptoQuant, there are actually lower than 2.27 million BTC deposited at exchanges and having fewer cash obtainable for buying and selling alerts that buyers are unwilling to promote within the brief time period. This can be a dynamic that many buyers think about to be bullish.

Even with the obvious steadiness between name (purchase) and put (promote) choices on Friday’s $1.1 billion expiry, bears are higher positioned after Bitcoin stabilized barely above $50,000.

A broader view utilizing the call-to-put ratio reveals a modest 7% benefit to Bitcoin bulls as a result of the $555 million name (purchase) devices have a bigger open curiosity versus the $520 million put (promote) choices. Nevertheless, the 1.07 indicator is misleading as a result of the 11.5% worth drop over the previous week prompted most bullish bets to develop into nugatory.

For instance, if Bitcoin’s worth stays under $52,000 at 8:00 am UTC on Dec. 10, solely $50 million price of these name (purchase) choices will probably be obtainable. That impact occurs as a result of there isn’t a worth in the best to purchase Bitcoin at $55,000 whether it is buying and selling under such worth.

The numbers recommend that bulls are set for a significant loss

Beneath are the three most probably eventualities primarily based on the present worth motion. The variety of choice contracts obtainable on Dec. 10 for bulls (name) and bear (put) devices differ relying on the expiry BTC worth. The imbalance favoring either side constitutes the theoretical revenue:

• Between $47,000 and $50,000: 400 calls vs. 6,600 places. The online result’s $300 million favoring the put (bear) devices.
• Between $50,000 and $54,000: 1,700 calls vs. 4,700 places. The online result’s $160 million favoring the put (bear) devices.
• Above $54,000: 2,400 calls vs. 2,900 places. The online outcome favors the put (bear) choices by $30 million.

This crude estimate considers the decision choices being utilized in bullish bets and the put choices which might be completely in neutral-to-bearish trades. Even so, this oversimplification disregards extra advanced funding methods.

For example, a dealer may have offered a name choice, successfully gaining a detrimental publicity to Bitcoin above a selected worth. However, sadly, there’s no simple solution to estimate this impact.

Bears will do their greatest to carry BTC under $50,000

Bitcoin bears want a mild push to sub-$50,000 to attain a $300 million revenue. Then again, bulls would want a 7.2% worth restoration from the present $50,500 to cut back their loss by half.

Contemplating the $2 billion liquidation of leverage lengthy positions on Dec. 4, bulls are seemingly attempting to remain afloat and will probably be unwilling so as to add extra threat proper now. It will be unnecessarily ineffective for bullish buyers to waste their efforts attempting to salvage this short-term loss.

So, on this occasion, bears look set to take care of the higher hand on this weekly choices expiry.

The views and opinions expressed listed below are solely these of the author and don’t essentially replicate the views of Cointelegraph. Each funding and buying and selling transfer entails threat. It’s best to conduct your individual analysis when making a choice.