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Will Bitcoin Prices Soar Above $11,000 When Bitcoin Options Expire Tomorrow?

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Bitcoin prices dipped yesterday to weekly lows but bounced today as the markets await the expiration of Bitcoin options tomorrow on several exchanges. Meanwhile, a lot of BTC is being moved around by whales. The latest of these large movements involved a $208 million inflow to Binance and OKEx, all between anonymous wallets. Also, a transfer of 1,100 BTC has been tracked to an unknown wallet on Bitstamp. 

The movement of cryptos between anonymous wallets is starting to ruffle feathers in Russia, where the parliament is considering criminalizing non-disclosure of ownership of crypto wallets. The proposal from Russia’s Finance Ministry is an amendment to the existing crypto law. It states that any wallet owner who receives crypto exceeding 100,000 rubles (roughly $1,300) per annum must inform the tax authorities or face a fine of 30% of the amount to a minimum of 50,000 rubles ($650). It also prescribes the option of a 3-year jail sentence. 

Expiration of Bitcoin options and futures provides some indication as to the possible price action on the crypto pair. A lot of the Bitcoin options positions, which are worth about $1billion, are set at expiration price of between $11,000 and $12,000. The expiry price is, therefore, higher than the current price. If these options are exercised, we could see price appreciate as the markets try to erase the arbitrage situation. However, options contracts do not obligate the holder to exercise them, so if these options are left unexercised, prices may stay the same or even drop. However, a key factor to consider is the price at which these contracts were purchased. 

Technical Outlook for BTCUSD

Bitcoin prices attempted a breakdown of the 10290.44 support, but buyers resisted this and today’s candle shows an uptick that challenges the 10464.78 resistance. A breakout above this level will have free room to target the 10930.82 resistance. Further ascent breaks this level and pushes into the weak supply zone, which stands as the barrier between Bitcoin prices and the $12,000 price level, where a much stronger supply zone and the cap of many Bitcoin options contracts exist. 

On the flip side, failure to gain traction above the current resistance leaves BTCUSD vulnerable to further selling, which may target the 9939.77 price level, with 9427.71 and 9100.32 forming possible downside targets. 

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BTCUSD Daily Chart

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