TL;DR

• $2.7B worth of profitable options set to expire tomorrow — which should cause a flurry of buying/selling of BTC & ETH (and right now, the data shows there will be more buying than selling).

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Good news!

Fresh upward momentum is expected to hit the crypto market tomorrow.

Here’s why:

Friday is the last trading day of the quarter — and traders have a habit of buying options that expire on these days.

Option trades are exactly what they sound like:

An option to buy or sell an asset (in this case Bitcoin and/or Ethereum) at a certain price in the future. Options to buy an asset are known as ‘calls,’ while options to sell are known as ‘puts.’

(Why? No idea ¯\_(ツ)_/¯ probably because it makes traders sound smart).

Right now, roughly 27% ($2.7B worth) of the $10B of options set to expire are ‘in the money’ (i.e. profitable), which means they will be acted upon — resulting in a flurry of buying/selling.

The key question in cases like this is:

Which of the two profitable options make up the majority — the options to buy (calls), or to sell (puts)?

Cause if the buy orders are the dominant ones, that means we’re going to see a bunch of buying pressure (helping to push the price up). While if the sell orders are the majority, the inverse will happen.

But wait! It gets more confusing!

In this web of financial back and forth, traders can sell their options to other traders.

And by looking at which of the two options is most in demand on the secondary market, we can get an idea of whether there will be net buying, or selling tomorrow.

As promised up top, the good news is:

As of this writing, buy options are winning that race.

This could have changed by the time you’re reading this (in fact, news just broke that the US government is about to sell a bunch of seized BTC)…

But for now, we’re in good shape!