Bitcoin Bears Bet $24,000 Mark Won’t Be Crossed By Friday

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Cryptocurrencies have rallied since the beginning of this year, with BitcoinBTC/USD registering a return of 39.48%. However, the Bitcoin bears seem to have bet that the apex coin will not break above the $24,000 mark by Friday. And so far, it has paid off.

What happened: Options data for Friday’s expiry shows that the maximum open interest on the call side sits at $24,000, indicating that smart money, also known as professional traders betting name, seems to bet this is the short-term resistance.

Also Read: Best FTX Alternatives: How to Protect Your Crypto

The Strategy: The “Bear Call Spread” is a bearish strategy where a trader will earn net credit by selling short or writing a lower call option while simultaneously buying a higher call. This buying buy of the upper leg acts as a hedge in case of a sudden rise in the price of the asset while reducing the margin money one has to park to short the initial leg.

Options data from Delta Exchange shows Bitcoin’s $24,000 call expiring Friday was trading near $430 on Jan. 21 when the apex coin hit a short-term high of around $23,278. Professional traders appear to have shorted the $24,000 call to levels near the $430 mark at the upper end. Those who could have taken the Bear Call Spread with the $24,500 call would have bought this last call at levels near $308. This gives a spread of $122.

Earnings: Bitcoin has been trading relatively flat since last week and failed to break above $24,000. Based on current option prices, the spread between these calls currently stands at just $37. This means that Bitcoin bears that have gone for the Bear Call Spread are already sitting on gains of $85. One remarkable thing about Bitcoinoptions is that the spread between bid and ask is wide and it is not necessarily possible to get the best prices unless you use a pricing formula and wait. the correct levels and volumes to deploy the trade.

Given that the current open interest levels also show the bears continuing to maintain their open positions at the $24,000 level, it seems unlikely that the asset will break above this mark on the upside in the near term. If Bitcoin continues to trade below $24,000 by Friday, the bears who had deployed the aforementioned strategy at the peak levels seen last week will retain the entire $122 gap.

Read next:Bitcoin, Ethereum, Dogecoin Spike: Analyst Warns Apex Crypto Could Fall Back to $20,000 if Tech Selloff Spikes

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