Bitcoin Options Traders Favor Higher Bets Amid Bullish Sentiment
Bitcoin traders are increasingly opting for options contracts at $65,000, $70,000, and $75,000 on Deribit. The surge in out-of-the-money calls signifies a prevailing bullish sentiment despite concerns over market conditions. Amid apprehensions of a price drop, traders are seizing the opportunity to invest in bullish options near all-time highs. Deribit, the leading crypto options exchange, witnessed a flurry of activity with calls at various strike prices. Each options contract represents one BTC, granting investors the right to buy the asset at a predetermined price by a specific date. The buying spree of higher strike calls indicates a strong bullish stance among experienced traders.
Bitcoin Recent Surge to $50,000
Kelly Greer, Head of Americas Sales at Galaxy, noted a significant interest in $50k, $60k, and $75k calls, signaling confidence in bitcoin’s future. Historically, concentrated activity in out-of-the-money calls has foreshadowed significant price rallies in the past. Options market positioning serves as a reliable indicator for predicting market movements. The current bullish trend echoes the behavior seen during the 2020-2021 bull market, where calls at $80,000 were popular among traders. Bitcoin’s recent surge to $50,000, driven by robust ETF inflows, underscores the market’s bullish momentum.
Technical indicators like the 14-day relative strength index suggest overbought conditions, hinting at a potential market correction. However, caution prevails among traders as the RSI surpassed 70, indicating a possible short-term profit-taking phase. Alex Kuptsikevich, senior analyst at FxPro, warns of a slowdown in Bitcoin’s upward momentum, especially as it nears previous peaks. Additionally, concerns loom over Genesis’ planned sale of $1.6 billion in cryptocurrencies, potentially impacting market prices. Genesis’ motion to liquidate assets held in Grayscale’s trust products adds uncertainty to the market outlook.
Despite technical indicators signaling overbought conditions, Bitcoin traders remain optimistic, favoring higher strike options contracts.
