Strategic Bets Diverging from Bitcoin’s Downtrend
Crypto options traders are placing strategic bets that diverge from the ongoing downtrend in bitcoin’s (BTC) price. Over the past 24 hours, bitcoin’s value declined by more than 1% to $64,500, continuing the pullback from recent highs near $72,000, according to CoinDesk data. Despite this, the flow in bitcoin options listed on leading exchange Deribit shows a bias towards call options at levels (strikes) significantly above the cryptocurrency’s current market rate. This may indicate that sophisticated investors expect the current price weakness to pave the way for a more extensive rally.
Abnormal Buying Flow in High-Strike Call Options
In the options market, an unusually large buying flow of December and March expiry $90,000-$100,000 calls was observed over the past 24 hours. QCP Capital, based in Singapore, noted in a market update that this suggests the market is identifying a bottom and positioning for a sustained rally, potentially lasting into 2025. A call option grants the purchaser the right, but not the obligation, to buy the underlying asset, BTC, at a predetermined price at a future date. This indicates a bullish market sentiment from call buyers.
Active Bitcoin Options Concentrated in High-Strike Calls
The chart reveals the most active bitcoin options on Deribit in the past 24 hours. Activity is primarily concentrated in June expiry calls at $65,000, $68,000, and $70,000. Additionally, there is a July expiry call at $110,000 and a December expiry call at $95,000. The divergence between options market sentiment and bitcoin’s price is further highlighted by the call-put skew. This skew shows traders’ willingness to pay for asymmetric payouts in either direction.
Positive Skew Indicates Upside Bias
According to Amberdata, the one-, two-, three-, and six-month skews have remained consistently positive through the recent BTC price pullback. This suggests a bias towards calls or an upside. Only the seven-day skew has turned negative, indicating a demand for downside protection.
Bitcoin’s Decoupling from Nasdaq’s Uptrend
Bitcoin has recently decoupled from Nasdaq’s uptrend. This is mainly due to long-term holders and miners selling coins. Additionally, there is increasing speculation about the non-directional nature of ETF inflows. On Thursday, the German government moved BTC worth $425 million to some cryptocurrency exchanges, likely intending to sell.
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