Investors hedge bets on Bitcoin with $50K call options before ETF decision

The crypto market is currently charged with tension, anticipating the U.S. Securities and Exchange Commission’s impending decision on the first spot Bitcoin ETF. Amidst divided opinions over whether the SEC will approve the ETF in the coming days or postpone the decision again, a close analysis of Deribit’s Bitcoin options market reveals traders bracing for considerable price movements in January.

As of Jan. 5, the total open interest in Bitcoin options on Deribit is 228,646.70 BTC, representing a notional value of $10.05 billion. This substantial figure indicates a high level of market participation and interest in Bitcoin’s future price movements.

How To Get Free Crypto  

The dominance of call open interest, comprising 162,694.50 BTC compared to put open interest at 65,952.20 BTC, suggests a bullish sentiment among investors. They appear to be anticipating or hedging against a potential increase in Bitcoin’s price.

The breakdown of open interest by strike price further reinforces this bullish sentiment. The highest concentration of call options is at the $50,000 strike price, with a value of $1.05 billion. This level could be viewed as a significant psychological and financial threshold that many investors are betting Bitcoin will reach or surpass. The next highest concentration is at the $45,000 and $60,000 strike prices, indicating optimism for even higher prices, though with lesser conviction than for the $50,000 mark.

Graph showing the open interest on Bitcoin options of all expiration dates by strike price on Jan. 5 (Source: Deribit)

Regarding open interest by expiration, the data shows a heavy concentration of call options for the Jan. 26 expiration, with $2.21 billion in calls versus $988.49 million in puts. This suggests that the bullish sentiment is more pronounced for the medium term, with a large part of the market anticipating significant developments surrounding the Bitcoin ETF to occur before this date.

Coinbase Banner  

Graph showing the open interest on Bitcoin options by expiration date on Jan. 5 (Source: Deribit)

The regular trade breakdown, showing almost equal percentages of puts and calls bought and sold —17.8% and 17.9% for puts, 32.1% and 32.2% for calls, respectively —  indicates a balanced market in terms of trading activities. The data shows that a higher percentage of market participants are engaged in call option transactions compared to puts. This indicates a stronger interest in betting on or hedging against an increase in Bitcoin’s price. The balance between calls bought and sold is also nearly equal, suggesting that for every investor speculating on a price rise (by buying calls), there is almost an equal number of investors (or perhaps the same investors in different transactions) who are either more cautious or looking to profit from selling these options.

Graph showing the regular trade breakdown for Deribit options on Jan. 5 (Source: Deribit)

Data from Deribit reflects a predominantly bullish sentiment, with investors showing a strong belief in the potential for Bitcoin’s price to increase, particularly towards the $50,000 level in the short to medium term. However, a substantial amount of put options and balanced trade activities indicate a cautious approach among traders, with many preparing for further volatility.

Go to Source
Author: Andjela Radmilac

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

You May Also Like

More From Author

This site uses Akismet to reduce spam. Learn how your comment data is processed.