Bitcoin price action at the moment is a bit confusing. So why? Because there is no clear direction regarding the bulls and bears in the market, both are waiting for their time to be active.
After the sales pressure dropped BTC to $ 55,000, the cryptocurrency is traded around $ 59,500 at the time of writing this article. While the market remains volatile, a significant displacement may occur towards the end of the month in terms of breaking a key price range.
Why is March 26 important for Bitcoin?
The significance of the aforementioned date relates to the derivatives market, especially Options. Open Positions in the options market determines the number of active contracts and is a representation of the amount of liquidity on specific expiry dates.
March 26 is the next three-month expiry date and expiration date for major Options and we can see a significant change in the Bitcoin price market.
The attached chart shows the growth recorded after the previous two quarters of maturity. September 25, 2020, for example, started a bullish period that allowed Bitcoin to surpass its all-time high of $ 20,000.
Following the expiry of the December 25 contracts, Bitcoin set up another bullish leg, climbing over $ 50,000 in under 2 months.
Currently, Open Positions in BTC Options for March 26, 2021, more than any other expiry period. This indicates that March 26 is currently attracting the highest liquidity in the derivatives market.
It is now less than 10 days before the next big maturity expires, but it’s important to note that the market may not be that simple or bullish again. Dramatic price movements can take place in any direction and in the short term we can witness a new local bottom or a new high.
Are Bitcoin CME Options indicative of the direction?
The number of purchases increased last month, according to a recent Ecoinometrics report. The highest purchase / sale rate compared to last year was achieved. While this pointed to diminishing bullish sentiment for Bitcoin, these purchases were in the $ 40,000-60,000 range. Therefore, the expected fixes may not be far-fetched.
However, it should be noted that BTC CME Options do not represent the entire market, as the contracts on the CME are currently around 1,500, which equates to approximately 7,500 BTC.