Fears of correction in Bitcoin prices draw attention with technical indicators. Meanwhile, the specter of collapsed lender Genesis looms. However, a different story emerged from the shadows – the options market. Here, the increase in bullish bets painted a vivid picture, pointing to a potential price explosion that could leave even the most experienced investors breathless. Here are the details…
Wave of optimism in Bitcoin data on Deribit
Over the weekend, Deribit, the undisputed champion of crypto options exchanges, witnessed an exciting show of optimism. Investors specifically targeted strike prices of $65,000, $70,000 and even a jaw-dropping $75,000. Thus, he flocked to out-of-the-money (OTM) call options. Options, which were considered “cheap” because they were significantly away from the current price, were sending a clear message. Experienced players were betting big on the future of the rise.
Galaxy America Sales Manager Kelly Greer said, “We are seeing intense open interest in $50,000 calls. We saw flows in $50k, $60k and $75k calls. “These flows show buyers’ belief… It shows that investors have a constructive view on Bitcoin.” he shared. This wasn’t just speculation; It was a calculated move. Because, according to Greer, it reflected a similar strategy used during the 2020-2021 bull run. Here, OTM call purchases of $80,000 and above paved the way for a meteoric price increase.
What is the last rally attributed to?
Bitcoin’s recent rally, doubling from $38,500 to $50,000 in October, can be partially attributed to this bullish option movement and capital injection from strong ETF inflows. However, amid the celebratory cheers, cautionary whispers began to circulate. The 14-day Relative Strength Index (RSI), a technical indicator, rose above 70. Thus, it gave a warning sign, indicating overbought conditions.
This historical indicator usually points to a short-term price correction, urging investors to tighten their belts before possible turbulence. The fire of unrest was fueled by bankrupt lender Genesis threatening to put downward pressure on prices by forcibly selling $1.6 billion worth of Bitcoin and other cryptocurrencies. This potential headwind has cast a shadow of doubt over the otherwise optimistic outlook.
Despite these concerns, the options market continues to sing a bullish tune. The intensification of OTM call buying mirrors the 2020-2021 bull run, a historical precedent that has encouraged investors anticipating a similar price explosion. Time will tell whether this optimism will turn into reality.
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