As Friday’s $860 million options expiration approaches, Bitcoin’s (BTC) 32 percent weekly surge has become bears’ worst nightmare.
Over 99 percent of bearish wagers utilizing put (sell) options are anticipated to become worthless once the $54,000 mark is breached.
Bears are in a perilous situation, especially since Bloomberg’s Crypto Outlook predicted that Bitcoin’s $50,000 resistance was set to give way to support.
Senior commodity strategist Mike McGlone noted issues such as rising adoption and dwindling supplies on exchanges.
Bloomberg also reported that conventional finance investors’ fears increased as protection against the potential of a US government default reached its highest level in six years.
Furthermore, one-year credit-default swaps, or the cost of insuring against a payment delay, have climbed from 4 to 27 basis points since mid-September.
Another important statistic that undoubtedly helped this week’s bull run was Bitcoin’s hash rate, the projected processing power supporting network miners.
In May, China prohibited coal-based electricity for cryptocurrency mining, causing a significant reduction in capacity.
This week, the bulls capitalized on these favorable conditions, propelling Bitcoin to its highest level since May 12 at $55,000.
Concerning the $860 million options expiry on Friday, October 8, bears will need a miracle to bring the price below $50,000 to escape severe losses.
In other words, if Bitcoin continues over $54,000 on Friday, just $2.7 million in neutral-to-bearish put options will be exercised at the expiration.
If Bitcoin trades over $50,000 at 8:00 a.m. UTC on Friday, a right to sell (put option) becomes worthless.
However, during bull runs, such as the one Bitcoin is now experiencing, the amount of work required for a seller to put in to liquidate longs is enormous and typically futile.
Simply said, assuming no shocks emerge before October 8, Bitcoin should continue its upward trend.