Bitcoin Bears Seeks To Manipulate Price Below 60,000 Ahead Of Friday Options Expiration


Bitcoin bears are aiming for prices below $ 60,000 before the $ 1.1 billion options expire on Friday and are hoping the current price drop is a chance for turn the tide on the bulls, which were taken by surprise when the No.1 crypto lost 9% of its value in 24 hours on November 16.

Bitcoin was trading at $ 56,830.04 as of this writing.

a expiry or the expiration date in options trading is when a position automatically closes. Traders need to decide what to do with their open position before the expiration date. Homeowners can Choose exercise the option, close the position to realize their profit or loss, or let the contract expire worthless.

Most of the call (buy) options for November 19 were placed at $ 66,000 or more. “On the face of it, the $ 630 million call (call) options dominate the weekly expiration by 35% versus the $ 470 million put (put) instrument. Still, the call-to-put ratio of 1.35 is misleading as the recent price crash will likely wipe out most bullish bets, ”Cointelegraph reported.

Market manipulation

The bears may have been helped by two negative events in the past week. On November 12, the United States Securities and Exchange Commission rejected VanEck’s spot Bitcoin ETF application – not unexpectedly – citing uncertainty over Tether’s stablecoin (USDT) and the inability to deter market manipulation and Bitcoin trading fraud. On November 15, US President Joe Biden sanctioned approval of the Infrastructure Bill, which requires digital asset transactions exceeding $ 10,000 to be reported to the Internal Revenue Service starting in 2024.

In March 2019, cryptocurrency asset manager Bitwise released analysis for the SEC findings that 95% of Bitcoin spot exchanges are rigged in all transaction volumes on 71 of the 81 exchanges analyzed. According to the Bitwise study, only 5% of Bitcoin cash transactions are not rigged by unregulated exchanges. Bitwise was looking to list Bitcoin Exchange Traded Funds (EFTs).

According to a forensic study by finance professors at the University of Texas and Ohio State University, a single anonymous market manipulator is credited with pushing Bitcoin over $ 20,000 during the historic boom in crypto in 2017. Almost all of the Bitcoin boom at the time can be attributed to “one big player,” wrote John Griffin and Amin Shams.

They discovered that Tether, a digital currency linked to a corresponding fiat currency, was exchanged for Bitcoins as part of a manipulation scheme during the crypto boom in 2017, CNBC reported in November 2019. Griffin and Shams tracked clusters of data to a single source, a large account at Bitfinex – one of the world’s largest digital currency exchanges. The study found that, through Bitfinex, the single player was manipulating demand for Bitcoin through “extreme” flows of Tether coins.

“One of the main concerns of the SEC is that crypto is subject to manipulation. This study seems to give credibility to this argument, ”Cowen analyst Jaret Seiberg told CNBC at the time.

Carol Alexander, professor of finance at the University of Sussex Business School, has written in the past about identifying the manipulation of Bitcoin options settlement. On June 26, 2020, she observed and shared her dips timing analysis in the price of Bitcoin on the day the options expire.

“Given the obvious moments of these bitcoin price declines illustrated in the chart below, the settlement price manipulation is a certainty,” Alexander wrote. “The profits resulting from these put options will have far exceeded the profits from perpetual futures / manipulations.”

The BTC / USD on June 26 plunges between 07:00 and 09:15 UTC and again between 14:00 and 15:03 UTC around the options expiration times. Source: regulation- manipulation-carol-alexander /

A drop in Bitcoin prices in May 2021 to multi-month lows near $ 46,000 has been attributed to fears of an anticipated rate hike by the Federal Reserve and Elon Musk’s turnaround on acceptance. of Bitcoin. However, Fredrick Collins, options trader and Glassnode researcher, said the action was likely made worse by options market makers selling Bitcoin in the spot / futures market to hedge their books (offset bullish exposure) .

“The market makers were very short puts in the range of $ 52,000 to $ 50,000, and I estimate they were forced to sell almost 2,900 bitcoins during the crash to compensate for the short gamma exposure.” , Collins said. CoinDesk in a Twitter conversation. “It probably exacerbated the bearish movement.”

The growing cryptocurrency options trading “has become a force to be reckoned with for participants in the underlying Bitcoin cash market, with monthly maturities proving to be a catalyst for price volatility,” he said. Omkar Godbole said for Coindesk in May 2021. “The fact that traders and analysts are starting to assess the hedging activity of cryptocurrency options market makers reflects the growing relevance of the derivatives segment in the Bitcoin market.

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