Over the past two months, Bitcoin (BTC) has respected a slightly ascending trend, bouncing multiple times from its support.

Even though that might sound positive, Bitcoin’s performance year-to-date remains a lackluster negative 14%. On the other hand, the Bloomberg Commodity Index (BCOM) gained 2% in the same period.

The broader commodity index benefited from price increases in crude oil, natural gas, gold, corn, and lean hogs. Worsening macroeconomic conditions pressured the supply curve, which, in turn, shifted the equilibrium price toward a higher level.

Moreover, the United States approved a $1.5 trillion spending bill on March 15 that funds the government through September. President Joe Biden’s signing of the legislation averts a government shutdown but further pressures the U.S. national debt, now at over $30.3 trillion.

Still, cryptocurrency traders are increasingly concerned about the U.S. Federal Reserve rate hikes expected throughout 2022 to contain inflationary pressure.

Investors took profits on riskier assets, causing the U.S. Dollar Index (DXY) to reach its highest level in 21 months at 99.2 on March 11. The index measures the dollar’s strength against a basket of top foreign currencies.

Bearish bets are mostly below $40,000

Bitcoin’s recovery above $40,000 on March 26 took bears by surprise as only 7% of the bearish option bets for March 18 have been placed above such a price level.

Bulls might have been fooled by the recent $45,000 resistance test on March 1 as their bets for March 18’s $760 million options expiry go all the way to $65,000.

A broader view using the 1.26 call-to-put ratio shows more sizable bets as the call (buy) open interest stands at $425 million against the $335 million put (sell) options. Nevertheless, as Bitcoin is now back above $40,000, most bearish bets will likely become worthless.

For instance, if Bitcoin’s price remains above $40,000 at 8:00 am UTC on March 18, only $24 million worth of those put (sell) options will be available. This difference happens because there is no use in a right to sell Bitcoin at $40,000 if it trades above that level on expiry.

Bulls might pocket a $320 million profit

Below are the three most likely scenarios based on the current price action. The number of options contracts available on March 18 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

• Between $38,000 and $40,000: 1,700 calls vs. 1,300 puts. The net result is balanced between the call (bull) and put (bear) instruments.
• Between $40,000 and $41,000: 3,200 calls vs. 600 puts. The net result favors bulls by $105 million.
• Between $41,000 and $42,000: 4,200 calls vs. 300 puts. Bulls boost their gains to $160 million.

This crude estimate considers the call options used in bullish bets, and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.

For instance, a trader could have sold a call option, effectively gaining a negative exposure to Bitcoin above a specific price. But unfortunately, there’s no easy way to estimate this effect.

Related: Bitcoin risks final ‘bear market capitulation’ as rich investors continue BTC selloff — analyst

Bears have incentives to suppress Bitcoin price

Bitcoin bears need to pressure the price below $40,000 on March 18 to avoid a $105 million loss. On the other hand, the bulls’ best case scenario requires a push above $41,000 to increase their gains to $160 million.

Bitcoin bulls had $98 million leverage long positions liquidated on March 16, so there’s less incentive to push the price higher in the short term. With this said, bulls will likely try to defend $40,000 support until the March 18 options expiry.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.