How do you trade bitcoin now? Carefully.
"Max pain" for the May expiry is $50,000.
The crypto car drove to the dump Monday as most blockchain assets fell.
Not all industry participants are amused by dogecoin’s tricks.
"Market makers were heavily short puts in the range of $52,000 to $50,000, and I estimate were forced to sell nearly 2,900 bitcoin," one trader said.
The last time bitcoin traded at this level was almost two weeks ago, on April 17.
Bias for short-term bitcoin puts or bearish bets has weakened in the wake of price rise.
“This is a time to make sure that you have some dry powder and are not overextended,” said one trader.
The BitVol index level puts the cryptocurrency's annualized volatility at 100%.
As long as these options remain open in the market, the next couple of days could be volatile for bitcoin.
Back in October, one trader made a long-shot bet that bitcoin would hit $36,000 by January. It paid off in a spectacular way.
$14.5 billion in bitcoin options have traded on Deribit in the first two weeks of 2021.
As bitcoin rallied from $13,400 to over $19,000, a trader who bought the $36,000-strike January expiry call saw a paper profit of more than $4 million.
At press time, bitcoin was seeing a 6% probability of bitcoin trading above the historical 2017 all-time high of $20,000 by the end of December.
Hxro and FTX have partnered to make options trading more accessible for retail traders.