According to one analyst, Bitcoin (BTC) options indicate an upward trend according to the strike position and put-call ratios for the month-end expiry in March.
Bitfinex Head of Derivatives Jag Kooner said that since Bitcoin hit its all-time high, the most traded products by volume have been monthly and mid-month expiration call options with a $70,000 call price.
This concentration of call options at a $70,000 strike price on Deribit, the world’s largest Bitcoin options platform, is seen in both weekend Friday and month-end expiration transactions in March.
Kooner suggests that the current put-call ratio of Bitcoin options has traders bullish. Kooner said, “The put-call (put-call) ratio has remained continuously below 0.6 for the first time in 6 months, and the 24-hour put-call ratio presents an even more bullish outlook with 0.47.” said.
Bitfinex head of derivatives noted that implied volatility in the options market has decreased recently, pointing to lower volatility expectations among traders over the past 24 hours. As a result, the premium paid for options fell across all strike prices, making position taking costs cheaper. Deribit’s implied volatility index for Bitcoin dropped from 77% to 72% in the last 24 hours.
Kooner continued his words as follows:
“Decreasing implied volatility values generally lead to a decrease in option premiums because the expectation of a lack of volatility in the future compared to the past provides lower risk for options market participants.”
*This is not investment advice.
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