Data Breach & Crypto

Bitcoin Rebound Has Crypto Options Traders Anticipating $100K

The number of active bitcoin call contracts is significantly higher than puts, indicating bullish market sentiment.

The recent resurgence in Bitcoin’s price has ignited a surge in interest among options traders, particularly in out-of-the-money call options ranging from $70,000 to $100,000 strikes. Analysts indicate a prevailing sentiment that Bitcoin’s trajectory leans towards further upward movement.

Since Federal Reserve Chairman Jerome Powell dismissed the possibility of additional tightening or rate hikes, Bitcoin has surged by over 12% to $63,470, according to CoinDesk data. The validation of Powell’s stance by Friday’s disappointing U.S. nonfarm payrolls (NFP) data has further fueled Bitcoin’s recovery.

Consequently, there has been a discernible uptick in demand for Bitcoin call options on prominent platforms such as Deribit and over-the-counter (OTC) networks. These options are notably aimed at anticipating a rally towards new highs, potentially surpassing $75,000 and even reaching $100,000.

According to a note from QCP Capital on Monday, there has been a bullish continuation in volatility and rates following the rebound, with a notable demand for BTC September expiry $75,000 and $100,000 calls. This trend is echoed by Paradigm, an OTC institutional cryptocurrency trading network, which observed increased demand for out-of-the-money (OTM) calls or those positioned well above Bitcoin’s current market rate.

Deribit data indicates a significant accumulation of over $688 million in call options with a $100,000 strike across various maturities, marking the highest notional open interest among all options listed on the exchange.

At present, more than 150,000 call option contracts with a total value of $9.5 billion are active on Deribit, reflecting bullish market sentiment, as evidenced by the fact that this volume is more than double the open interest in put options.

Market analysts, encompassing both fundamental and technical perspectives, are largely aligned in their view that Bitcoin’s trajectory is tilted towards higher values. Factors such as the U.S. election cycle and ongoing deficit spending continue to underpin this bullish sentiment.

10X Research, for instance, adjusted its strategic threshold from 68,300 to 62,000, suggesting a tactical bullish stance above the latter figure. Swissblock Insights anticipates a continued defensive stance for the dollar index (DXY), which typically bodes well for risk assets, including cryptocurrencies. Elliot wave analysis by John Glover, chief investment officer of Ledn, suggests a potential rise in Bitcoin’s price to around $92,000.

As per Elliot wave theory, trends unfold in five waves, with 1, 3, and 5 representing the primary trend, while 2 and 4 denote temporary retracements. Glover’s analysis indicates a forthcoming upward movement in Bitcoin’s price trajectory.

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