By
Chimamanda U. Martha
June 28th, 2024
As per QCP Capital, there’s an abnormally large flow into Bitcoin options with Dec and Mar [expiry] $90-$100K calls in the last 24 hours.
Despite the strong selling pressure in Bitcoin (BTC) recently, the BTC derivatives data from Deribit shows that the crypto options traders are strategically putting bets while divulging from the recent downtrend. In the last 24 hours, the Bitcoin price has continued to face additional selling pressure slipping under $65,000. In the last two weeks, the BTC price has pulled back by 10% from the high of $72,000.
As per the data on the crypto derivatives platform Deribit, the flow in the Bitcoin options remains biased towards call options at levels much higher than the current BTC price. This shows that sophisticated investors expect the ongoing BTC price weakness to translate into a strong bounceback and a run to even higher levels.
A call option grants the buyer the right, though not the obligation, to purchase the underlying asset, such as BTC, at a pre-agreed price on a future date. By purchasing a call option, the buyer expresses a bullish sentiment toward the market.
As per the recent market update by Singapore-based QCP Capital, there’s an abnormally large flow into Bitcoin options with Dec and Mar [expiry] $90-$100K calls in the last 24 hours. This shows that professional players see a bottom formation into Bitcoin very soon thereby positioning themselves for a sustained rally, that might extend further into 2025.
The below chart highlights the most active Bitcoin options in the last 24 hours. Most of the activity has focused on call options expiring in June at $65,000, $68,000, and $70,000, with additional interest seen in July calls at $110,000 and December calls at $95,000.
Photo: Velo
A Look Into Bitcoin Call-Put Ratio
According to Amberdata, the divergence between the options market sentiment and Bitcoin’s price is notably reflected in the call-put skew. This skew reveals that premium traders are willing to pay for asymmetric payouts in either the upward or downward direction.
Photo: Amberdata
Across different timeframes – one month, two months, three months, and six months – the skew has remained consistently positive despite recent pullbacks in BTC price. This indicates a prevailing preference for call options or potential upside movements. However, the seven-day skew has turned negative, indicating increased demand for protective options against potential downside risks.
In recent weeks, Bitcoin has been largely decoupling from the strong uptrend in Nasdaq. This is majorly due to the selling by long-term holders along with the sell-off from the Bitcoin miners. Also, there have been major outflows from the spot Bitcoin ETFs in the past week.
On Thursday, June 20, the German government moved a total of 1,700 Bitcoins to crypto exchanges Coinbase, Kraken, and Bitstamp, with the intent of selling.