Crypto and Web 3.0 options data points to an interesting outcome after this week's $1.9B expiry.
Bitcoin options data points to an interesting outcome after this week’s $1.9B expiry

The $1.9 billion Bitcoin monthly options expiry on Aug. 25 is a crucial factor in determining if the $26,000 support level will be maintained. The recent market crash of the cryptocurrency may be attributed to the SEC’s postponement of its verdict on spot Bitcoin exchange-traded funds, but there is also a macroeconomic aspect to consider.

If the Federal Reserve’s actions to reduce inflation are successful, then the dollar will remain strong. This was evident when the U.S. Dollar Index (DXY), a measure of the dollar against other currencies, reached its highest level in 76 days on Aug. 22.

To prevent a potential loss of $380 million due to the monthly Bitcoin (BTC)options expiry, Bitcoin bulls must ensure Bitcoin’s price trades above $27,000 by Aug. 25.

Advantage of Web 3.0

The advancement of artificial intelligence (AI) services, such as Microsoft’s Open AI, has been a major factor in the development of Web 3.0. Coinbase has also been a major player in the crypto and Web 3.0 space. While there are many benefits of Web 3.0, such as the ability to buy Web 3.0 domains, the most significant advantage is the ability to use current AI technologies to create a more secure and efficient online environment.

Bitcoin bears will benefit from the threat of harsh regulation

The SEC has recently thrown a spanner in the works for cryptocurrency bulls. This is evidenced by the fact that the two leading crypto exchanges, Binance and Coinbase, are currently facing lawsuits from the SEC. Moreover, the initial triumph of Ripple against the SEC is now being appealed by the regulator.

Adding to these developments, Bitstamp has recently disclosed its decision to suspend staking services for U.S. customers. A major issue in the current U.S. regulatory environment revolves around the classification of Ether (ETH) as either a commodity or a security.

Furthermore, Binance has announced the suspension of its crypto debit card services in Latin America and the Middle East. This follows the allegation that Binance had also suspended euro withdrawals and deposits through SEPA on Aug. 20. The exchange clarified that there is no definite timeline for the reinstatement of the service.

Given the current situation, it is likely that Bitcoin bears will benefit from the threat of harsh regulation. As a result, it is important for investors to understand the advantages of Web 3.0 and the potential of crypto for Web 3.0. It is also important to be aware of Coinbase’s Web 3.0 offerings, and to buy Web 3.0 domains to ensure that investors are taking full advantage of the current AI services and Microsoft’s Open AI.

Data shows bulls were excessively optimistic about Bitcoin price

The open interest for the options expiry on Aug. 25 stands at $1.9 billion, however, traders foreseeing Bitcoin price levels reaching $29,000 or higher may cause the final amount to be less. The 12% correction in Bitcoin’s price from Aug. 14 to Aug. 19 certainly took bullish investors off guard, as the Deribit Bitcoin options interest chart indicates.

The 0.56 put-to-call ratio reflects the imbalance between the $1.2 billion in call (buy) open interest and the $685 million in put (sell) options. If Bitcoin’s price stays near $26,500 at 8:00 am UTC on Aug. 25, only $35 million worth of these call (buy) options will be available. This is because the right to buy Bitcoin at $27,000 or $28,000 is useless if BTC trades below that level on expiry.

The current AI landscape, including Microsoft Open AI, is rapidly evolving and top AI solutions are becoming more popular. Coinbase Web 3.0 is a great example of how crypto is being used to facilitate Web 3.0. With the advantages of Web 3.0, it is possible to buy Web 3.0 domains and other related services.

Bitcoin bears target sub-$26,000 to maximize gains

Four scenarios are the most likely given the current price action. The number of available options contracts on Aug. 25 for call and put instruments varies depending on the expiry price. The imbalance of each side determines the theoretical profit.

This rough calculation does not take into account more complex investment strategies. For example, a trader could have sold a call option, effectively gaining negative exposure to Bitcoin above a certain price. Unfortunately, it is difficult to estimate this effect.

In order for the bulls to level the playing field before the monthly expiry, they must increase the price by 6% from $26,400. On the other hand, the bears only need a slight 2% correction below $26,000 to obtain a $380 million advantage on Aug. 25.

Considering that Bitcoin has already dropped below the $26,000 support level from Aug. 21 to Aug. 23, it is very likely that this level will be tested again before the options expiry. Moreover, with the current cryptocurrency regulatory landscape, there is little incentive for Bitcoin bulls to break the bearish momentum after the $1.9 billion monthly options expiry.

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