Key Points
- Bitcoin’s Options market shows a moderately bullish sentiment with high call Open Interest.
- Despite the bullish bias, a significant volume of put contracts remains, hinting at potential market volatility.
The Options market for Bitcoin (BTC) has been showing a somewhat bullish trend lately. This is evident from the call-to-put Open Interest ratio. At the time of writing, the Call Open Interest was at 11,873.52 contracts, surpassing the Put Open Interest which stood at 8,594.58 contracts. This results in a put/call ratio of 0.72, suggesting that a number of traders are betting on a price increase for BTC in the near future.
However, there is still a considerable amount of put contracts, particularly in the $75,000–$85,000 range. This could indicate a significant amount of hedging activity, which may suggest market uncertainty and a potential increase in volatility.
Bitcoin Open Interest and Expirations
When looking at the CME Bitcoin Futures Open Interest, there has been a steady increase over the past few months. However, after the price corrected from $105,000 to $80,000, Open Interest levels adjusted, reflecting a decrease in speculative activity.
A large number of contracts are set to expire within the next one to three months. This could mean a period of market readjustment is coming. In the past, such expirations have caused volatility, especially if traders decide to roll over positions or unwind existing contracts.
Bitcoin’s Price Trend
At the time of writing, Bitcoin was trading at $84,210, following gains of 0.27%. However, it is still well below key resistance levels, notably the 50-day moving average at $88,467 and the 200-day moving average at $96,227. This suggests that despite the bullish sentiment in Options, the cryptocurrency is still in a corrective phase.
Furthermore, funding rates across Perpetual Futures markets are showing a mix of positive and negative values. This is usually a sign of indecisiveness among traders. A sustained positive funding rate usually signals bullish momentum, while neutral or negative values indicate a cooling demand.
Bitcoin’s Short-Term Future
If Bitcoin reclaims the $88,000-$90,000 range, Options market activity could suggest further upward movement, potentially targeting $100,000 in the medium term. However, if the price remains below $85,000 and Open Interest continues to decrease, Bitcoin could retest support at the $78,000-$80,000 range. This would increase the risk of a short-term downside.
In conclusion, the Bitcoin Options market is showing mixed sentiments. Traders seem to prefer calls but are also hedging against possible downturns. The upcoming options expirations and Open Interest adjustments could lead to high volatility, making the $80,000-$90,000 range a critical zone for the cryptocurrency. Traders should pay close attention to funding rates, liquidity inflows, and key moving averages to anticipate Bitcoin’s next major move.
