Bitcoin (BTC<\/a>) crashed below $19,000 on Sept. 6, driving the price to its lowest level in 80 days. The movement not only completely erased the entirety of the 32% gains accrued from July until Aug. 15, it also wiped out $246 million worth of leverage long (buy) futures contracts.<\/p>\n Bitcoin price is down for the year but it\u2019s important to compare its price action against other assets. Oil prices are currently down 23.5% since July, Palantir Technologies (PLTR) has dropped 36.4% in 30 days and Moderna (MRNA), a pharmaceutical and biotechnology company, is down 30.4% in the same period.<\/p>\n Inflationary pressure and fear of a global recession have driven investors away from riskier assets. By seeking shelter in cash positions, mainly in the dollar itself, this protective movement has caused the U.S. Treasuries’ 5-year yield to reach 3.38%, nearing its highest level in 15 years. By demanding a loftier premium to hold government debt, investors are signaling a lack of confidence in the current inflation controls.<\/p>\n Data released on Sept. 7 shows that China’s exports grew 7.1% in August from a year earlier, after increasing by 18% in July. Furthermore, Germany’s industrial orders data on Sept. 6 showed a 13.6% contraction in July versus the previous year. Thus, until there’s some decoupling from traditional markets, there’s not much hope for a sustainable Bitcoin bull run.<\/p>\n The open interest for the Sept. 9 options expiry is $410 million, but the actual figure will be lower since bears became too overconfident. These traders were not expecting $18,700 to hold because their bets targeted $18,500 and below.<\/p>\n The 0.77 call-to-put ratio reflects the imbalance between the $180 million call (buy) open interest and the $230 million put (sell) options. Currently, Bitcoin stands near $18,900, meaning most bets from both sides will likely become worthless.<\/p>\n If Bitcoin’s price remains below $20,000 at 8:00 am UTC on Sept. 9, only $13 million worth of these call (buy) options will be available. This difference happens because the right to buy Bitcoin at $20,000 is useless if BTC trades below that level on expiry.<\/p>\n Below are the four most likely scenarios based on the current price action. The number of options contracts available on Sept. 9<\/a> for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:<\/p>\n This crude estimate considers the put options used in bearish bets and the call options exclusively in neutral-to-bullish trades. Even so, this oversimplification disregards more complex investment strategies.<\/p>\n For example, a trader could have sold a put option, effectively gaining positive exposure to Bitcoin above a specific price, but unfortunately, there’s no easy way to estimate this effect.<\/p>\n Related: <\/strong>Bitcoin price hits 10-week low amid ‘painful’ U.S. dollar rally warning<\/em><\/strong><\/a><\/p>\n Bitcoin bulls need to push the price above $20,000 on Sept. 9 to avoid a potential $130 million loss. On the other hand, the bears’ best-case scenario requires a slight push below $18,000 to maximize their gains.<\/p>\n Bitcoin bulls just had $246 million leverage long positions liquidated in two days, so they might have less margin required to drive the price higher. In other words, bears have a head start to peg BTC below $19,000 ahead of the weekly options expiry.<\/p>\n The views and opinions expressed here are solely those of the <\/em>author<\/em><\/a> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<\/div>\nBears were overly optimistic<\/h2>\n
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Bears aim for $18,000 to secure a $90 million profit<\/h2>\n
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Bulls have until Sept. 9 to ease their pain<\/h2>\n