As Bitcoin regains lost ground, options traders are betting on a move to $ 52K by the end of January
Despite bitcoin’s 20% drop last Monday, some options traders are betting on a continued rally in prices in the coming weeks.
At press time, the price is $ 35,580, bitcoin (BTC, + 7.64%) is up almost 16% from the low of $ 30,305 seen last Monday. Even so, the number one cryptocurrency by market value is still well below the weekend highs that were above $ 40,000.
However, some traders have been buying call options expiring on January 29 at the strike prices of $ 52,000, $ 64,000 and $ 72,000 in the Deribit market.
A call option gives the buyer the right, but not the obligation, to buy the underlying asset at a predetermined price on or before a specific date. A call option is a bullish bet, while a put option is a bearish bet. An options contract represents the right to buy or sell a bitcoin on Deribit.
A total of 4,000 contracts were acquired with the $ 52,000 option in the last 24 hours, according to data provided by Swiss-based data analytics platform Laevitas. Call options between $ 64,000 and $ 72,000 show a purchase volume in these options of 3,250 and 2,000, respectively.
Theoretically, buying the so-called $ 52,000 option is a bet that bitcoin will rise above that level on or before January 29, making the option “in-the-money.”
Currently, all three contracts are out-of-the-money (OTM), with the spot price well below these strike prices, trading at 0.045, 0.0260, and 0.0190 BTC, respectively.
Deep OTM options are relatively inexpensive and tend to earn significant value if the price rally materializes, generating large returns on small investments. As such, experienced traders with bullish price expectations often buy call options at higher strike prices.
Therefore, the latest call option purchases at the $ 52,000, $ 64,000 and $ 72,000 strikes indicate bullish market sentiment. Other indicators of the options market are making a similar call.
One-, three- and six-month call option biases, which measure the cost of call options relative to call options, remain entrenched in negative territory. That is a signal of call options, or bullish bets, which generate greater demand than put options.
According to analysts, on-chain fundamentals remain strong and the path of least resistance is to the higher side. “Don’t let the short-term $ BTC price action distract you. Fundamentals are strong, the network is healthy. Zoom out and HODL,” tweeted Rafael Schultze-Kraft, CTO of blockchain analytics firm Glassnode.
However, the cryptocurrency may find it difficult to chart a rapid move to new record highs above the high of $ 41,962 reached on Saturday, as the US Dollar Index is witnessing a recovery rally, weakening the appeal of bitcoin and gold in the markets.
In the ecosystem of cryptocurrencies, not everything is written, it is very important to seek first-hand information, information is power, blockchain-bitcoin technology is a technological revolution that offers opportunities to investors, it depends on each one to take the best possible decision. New announcements are expected.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.