I am not sure there are enough options on BTC to affect the price, but the MaxPain theory implies that the stock (or whatever) will, as expiration approaches, trend toward the point at which the most options expire worthless. That isn’t due to manipulation, but rather through dehedging by the option writers as expiration approaches. In options expiring this week, the MaxPain point seems to be in the 31-32k price range: link to cointelegraph.com
Above 31k, most puts are worthless. Below 32k, most calls are worthless. Thus, BTC may end the week in the 31-32k range.
Carl_R
1 year ago
Looking at those charts, it appears that the leveraged funds took a big short position in the $18,000 range back in 2020. Some of it was covered at a loss in early 2021, at prices between $35-60,00, but then new shorts were placed in late 2021 in the $40-65,000 range, so most of the current short positions are currently profitable. Meanwhile, the asset managers bought heavily in the $40-65,000 range in late 2021, and they are sitting on losses. What does this tell us? Not much. If the asset managers give up and fold, they could drive BTC down significantly. If the shorts elect to take profits, they could give BTC support, but then they very well might take new short positions at higher prices, as they did in the past.
My guess in that the asset managers will HODL, unless fund redemptions force them to sell, while the leveraged funds, with the luxury of holding profitable positions, may cover some of their positions, but then short into new rallies. Thus, while BTC could rally, the rallies may weak, and while BTC may not crash further, the potential is there if fund redemptions occur.
I note that while markets have been more thinly traded over the long holiday weekend, someone has moved BTC higher.
Agave
1 year ago
There is an interesting article from yesterday on SFGATE dot com via the Washington Post that talks about a woman tech writer and software engineer Molly White who is covering the shadier side of crypto hype and scams. Since I don’t think I can post a link, the article is called:
“First she documented the alt-right. Now she’s coming for crypto.”
Here’s an excerpt of the first two paragraphs. A worthwhile read, IMO.
“In a strange, animated YouTube video, Cryptoland paints itself as the
ultimate utopia, featuring luxurious villas, a casino and a private
club, all located on a pristine island in Fiji. Built by and for
cryptocurrency enthusiasts, it was looking for investors.
To Molly White, the project wasn’t just cringeworthy
bluster, it was promotional material for yet another potential scam –
one that was targeting the money of real people. Digging into
Cryptoland’s organizing documents, she found a business plan full of
contradictions and other red flags, like an address in the Seychelles
islands, a tax haven which has hosted previous high-profile crypto
scams.”
Six000mileyear
1 year ago
Future Contracts positions of small speculators has statistically been a great contrarian indicator when it and the underlying price are in bubble land. The surprising thing about the October/November 2021 peak is the volume of small spec contracts crashed right before the price. Maybe a larger spec was hiding as a small spec using multiple retail accounts?
Jackula
1 year ago
Wow! Thanks Mish! Love this kind of data!
Christoball
1 year ago
As long as we are talking about Hoots:
GIVE A HOOT, DON’T POLLUTE. With higher energy costs and the extreme amount of electricity it takes to mine a piece of data, will bitcoin loose vitality based on mining costs and gross polluter concerns???? Or will the woke crowd embrace it like they embrace gross polluter electric vehicles at any cost????
Good question and something I was going to cover in another post but I am getting tired of this nonsense.
Please see my addendum if you missed it. Nearly $16 billion in total bets.
The cost of mining is now very close to the Bitcoin mining reward. Another dip lower and these huge mining factories will lose money mining. The small guys might not care, for a while, but the big commercial farms will go offline.
That tells you the big miners don’t really believe in Bitcoin, they just want a US$ profit and sell their Bitcoins as soon as they mine them.
Will all these bets outside of US regulators I sense a big blowup somewhere.
There are blockchains like Algorand that use proof of stake instead of proof of work, and end up using about as much energy as credit card processors do. Bitcoin is busted old tech.
1-shot
1 year ago
I was at the April Miami bitcoin conference and most, if not all the folks I spoke to predicted at least $100k by year end and $350k in a year or so. Since that time it’s dropped from $48k to the $25-30k range.
Hope is not a good predicting tool. Hyoe is not a good predicting tool. Imo none of them have the slightest clue as to what the value or future price of bitcoin will be, including their head shill, Michael Saylor.
I own no crypto and have no agenda. My conference attendance was strictly for education and amusement. I got plenty of both.
Stay Informed
Subscribe to MishTalk
You will receive all messages from this feed and they will be delivered by email.
ultimate utopia, featuring luxurious villas, a casino and a private
club, all located on a pristine island in Fiji. Built by and for
cryptocurrency enthusiasts, it was looking for investors.
To Molly White, the project wasn’t just cringeworthy
bluster, it was promotional material for yet another potential scam –
one that was targeting the money of real people. Digging into
Cryptoland’s organizing documents, she found a business plan full of
contradictions and other red flags, like an address in the Seychelles
islands, a tax haven which has hosted previous high-profile crypto
scams.”