Here’s Why Bitcoin Price Could Touch $21K Before Friday’s $510M BTC Options Expiration

Bitcoin (BTC) has been trying to break above the $20,500 resistance for the past 35 days, with the last failed attempt on October 6. Meanwhile, bears have shown strength on four separate occasions after BTC tested levels below $18,500 during this period.

Investors remain uncertain whether $18,200 was truly the bottom because the support level weakens each time it is tested. That’s why it’s important for bulls to keep momentum during this week’s $510 million options expiration.

The expiration of the options on October 21 is particularly relevant because Bitcoin bears could make $80 million by suppressing BTC below $19,000.

Bears placed their bets at $19,000 and below

The open interest for the options to expire on October 21 is $510 million, but the actual number will be lower since the bears were overly optimistic. These traders completely missed placing bearish bets at $17,500 and below after BTC dumped below $19,000 on October 13.

The call-to-put ratio of 0.77 shows the dominance of $290 million put (sell) open interest against $220 million call (buy) options. Still, since Bitcoin is close to $19,000, most bearish bets will likely be worthless.

If Bitcoin’s price remains above $19,000 at 08:00 UTC on October 21st, only 4% of these put (sell) options will be available. This difference occurs because a right to sell Bitcoin at $18,000 or $19,000 is worthless if BTC trades above this level at expiration.

The Bulls can still turn the tables and secure a $150 million profit

Below are the four most likely scenarios based on current price action. The number of Bitcoin options contracts available on October 21 for call (bull) and put (bear) instruments varies, depending on the expiration price. The imbalance favoring each side constitutes the theoretical profit:

• Between $18,000 and $19,000: 0 calls vs. 4300 sets. The net result favors the put (bear) instruments by $80 million.
• Between $19,000 and $20,000: 1500 calls vs. 1100 putts. The net result is balanced between calls and putts.
• Between $20,000 and $21,000: 4300 calls vs. 100 putts. The net result favors the call (bull) instruments by $85 million.
• Between $21,000 and $22,000: 7200 calls vs. 0 putts. The net result favors the call (bull) instruments by $150 million.

This rough estimate considers the put options used in bearish plays and the call options exclusively in neutral-to-bullish trades. Yet this oversimplification ignores more complex investment strategies.

For example, a trader could have sold a put option, effectively gaining positive exposure to Bitcoin above a certain price, but unfortunately there is no easy way to estimate this effect.

Related: Sharp Bitcoin Price Movement Expected As Volatility Hangs At Record Lows And Sellers Are ‘Exhausted’

A few more drops below $19,000 would not be surprising

Bitcoin bears need to push the price below $19,000 to secure an $80 million profit. On the other hand, the bulls’ best-case scenario requires a pump above $21,000 to turn the tables and achieve a $150 million gain.

Bitcoin bulls had $80 million in leveraged long positions liquidated on October 12 and October 13, so they should have less margin than required to drive the price higher. Accordingly, bears have higher odds of pegging BTC below $19,000 before the October 21 weekly options expire.