Marcel Pechman of cointelegraph.com found a reason for the price of BTC to be kept below 29,000 USD. Does this make sense to you?
Bitcoin bears need to pressure the price below $29,000 on May 20 to secure a $190 million profit.
. . . bears will try to suppress BTC below $29,000 ahead of the May 20 options expiry and this decreases the odds of a short-term price recovery.
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Yes, it does make sense to be because there is a lot of money on the line. The people who sold the options don't want to pay out. If BTC is below 29k, then they don't have to sell BTC to the option buyers. So you can think of it as some big guys making some money on an insurance policy.
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Ok, so that's it. I actually find it difficult to understand how can they profit by keeping the price low? 😆
If BTC > $29k, then option sellers will have to sell BTC at 29k. If they don't have BTC, it means they must buy BTC at the current price.
If BTC < 29k, option sellers don't have to do anything and option buyers won't exercise the option because they can buy BTC for cheaper off the market.
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Interesting how options work.
Options are basically insurance. I pay someone some money to get the right to buy X at a price of Y. If the price of X is less than Y then there is no point in exercising your right.
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