Sirwin
Sirwin

Options Data Bitcoin Price Probabilities (60 days) | Crypto Market Update 1.12


Options Data Bitcoin Price | Market Update | Major Crypto News



Every couple of months, I like to perform a price probability analysis of Bitcoin to extract a realistic price range for the future. The price range extracted from the data helps with a few aspects. It aids in tempering my expectations and keeps my emotions in check. It counter-balances some of the sentiment that I shamefully absorb from crypto Youtube and Twitter. The data also provides a template for spotting tops and bottoms or, in other words, good zones to reduce/increase positions. I hope it can aid you in a similar fashion. 

The data extracted from options is math-based and derived from the Black Scholes Model, which finance utilizes to price options. The Model requires five input variables: volatility, current asset price, time until expiration, and the option contract price to extract future price probabilities of assets.

If you ever mess with options, the entire game is probability-based, similar to playing poker. I come from an options trading background, and this is the methodology I prefer to fall back on.

So below is an simple analysis of Bitcoin price for the next 60+ days using the options data from Bitcoin option contracts.

Please remember, the information is not absolute; it’s probabilistic.

 

Options Price Probabilities through 3.24

 

Options report from 12.16

If you don’t enjoy technical info, feel free to drop below to the conclusion.

 

Using the March 26 Bitcoin Options Expiration:

  • The 55k put option has a delta of .71 or 71% probability of BTC expiring below 55k

  • The 40k Call Option has a delta of .66 or 66% probability of BTC expiring above 40k

  • Max pain is 50k

  • The 90k put option has a delta of .96 or 96% probability of Bitcoin expiring below 90k

  • The 25k call option has a delta of .95 or 95% probability Bitcoin closes above 25k

 

The options market declares a 69% probability that Bitcoin closes between 40k and 55k on March 24, 2022. And a 95% probability Bitcoin closes between 25k and 90k.

 

Visualization of probabilities:

 

Let us explore other technical factors.

  • Bitcoin has been in a downtrend since November 9, 2021

  •  Strong support exists at 40–42k

  •  Strong resistance exists at 50k

  •  Max Pain dwells at 50k

  •  On-Chain metrics are shadowing a possible “short squeeze” scenario.

 

Conclusion

 

Max Pain will undoubtedly attract price action towards 50k, which would require a 16% climb from Bitcoin in the next 60+ days.

On another note, upcoming macroeconomic events will significantly influence the markets in the coming months.

Tomorrow’s core inflation report will be of utmost importance to all markets. Another high inflation mark will likely mean the FED will continue its aggressive rate hikes and bond tapering. Since crypto markets are considered “risk-on” assets, this could spark another bearish outcome.

A significant reduction of inflation would be the most beneficial outcome for equities markets, especially for the volatile crypto market and tech sector.

Today’s bullish retracement has kept sentiment interesting. Is the market anticipating a solid rebound? Or are bears collecting liquidity for a further regression of prices?

I would lean to the optimistic side for a couple of reasons. One, I don’t see the FED pulling the rug on the markets as fast as they claim. Two, on-chain metrics highlight a bullish sentiment, raising suspension well-organized traders are preparing for a climb.

 

Time will tell.

 

 


Photo by Hans Eiskonen on Unsplash

Crypto Market Update

 

Bitcoin (BTC) modestly rebounded today after seven days of selling pressure. The support at 42k has held up well. A likely re-test of the significant supports is probable.

Bitcoin Dominance (BTC.D) fell -1.08% during the bullish rebound. Traders are entering Ethereum and other altcoins in favor of Bitcoin for higher gains while the market has flipped bullish.

Ethereum (ETH) went up 4.86%, and Ethereum Dominance (ETH.D) rose 1.57%

 

Top Notable Gainers

Oasis Network (ROSE) has risen 22% after news of Binance Labs backing the Web3 focused platform with a $200M fund. Further information.

  • NEAR 12.68 +18%

  • MATIC 2.34 +15%

  • FTM 2.56 +15%

  • ONE .30 +13%

  • DOT 25.78 +10%

  • KSM 260 +10%

Notably, all the assets on the top gainers’ list today were mentioned on the Electric Capital Report that I happened to recap in yesterday’s newsletter.

 

Bitcoin Fear and Greed Index: 21 Extreme Fear

“Bitcoin” Google Trends: 37 (+4)

Bitcoin Options Max Pain (Jan 20): 37K

How to use The Fear and Greed Index for investing


 

Major Crypto News 

 

  • A recent poll released by JPMorgan shows 5% of their clients believe Bitcoin can reach 100k in 2022. However, don’t give the poll a lot of weight. The average age of participates is likely over 60.


 

Thanks for reading fam!

Gabi

Follow me on Twitter and Medium or subscribe to this FREE daily newsletter on Substack

How do you rate this article?

9


Gabi_
Gabi_

Market Research Analyst . Crypto Enthusiast. Hours of research condensed into a daily five minute report.


Daily Crypto Market Update and Trader Digest
Daily Crypto Market Update and Trader Digest

A daily report that covers the news, market conditions, events and opinions in the cryptoverse.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.