Bitcoin options traders are displaying unwavering confidence in the cryptocurrency's price trajectory, even amidst recent choppy price action following the release of softer-than-expected U.S. consumer price inflation (CPI) data. While a market that fails to respond positively to positive news can often signal a trend reversal, Bitcoin's options market indicates that traders maintain a bullish bias.
Data from Deribit, the leading crypto options exchange, reveals that the call-put skews remain positive across all timeframes, highlighting a persistently bullish outlook. The call-put skew measures the difference in volatility pricing between bullish calls and bearish puts. This skew suggests that traders are still favoring call options, which provide the right to buy an asset at a predetermined price, indicating their positive sentiment.
During the recent post-CPI price drop, traders on Paradigm, a crypto over-the-counter institutional liquidity network, notably acquired bitcoin calls expiring in December. However, the bullish flow observed during this price dip was relatively limited compared to a similar event earlier in the week.
The options market turned decisively bullish on BTC following BlackRock's application for a spot-based bitcoin exchange-traded fund with the U.S. Securities and Exchange Commission on June 15. Since then, the positive sentiment in the options market has remained strong, driving a 20% rally in bitcoin's price.
Lawrence Lewitinn, a director at The Tie, noted that only about a third of the open options positions in the market are puts, emphasizing the persistent bias towards calls in the crypto markets.
Despite the perplexing lack of upside movement in response to the CPI figure, analysts express confidence that the bitcoin rally will resume once prices surpass the $31,000 mark. Some observers attribute the limited price response to a significant movement of coins previously seized from the Silk Road darknet marketplace.
Richard Usher, head of OTC trading at crypto payments services provider BCB Group, believes that a move above $31,400 and a close above $31,000 are necessary to unlock further demand and fuel gains. The soft reading on the U.S. CPI is expected to support a risk-on sentiment across various asset classes.
Paradigm echoes a similar sentiment, stating that BTC skew favors calls over puts, and the presence of flag patterns and Fibonacci retracements suggest that breaking the $31,000 resistance could propel prices to the $35,000-$37,000 range.
Amidst the choppy price action, Bitcoin options traders continue to exhibit confidence in the cryptocurrency's potential, signaling a bullish outlook for the near future.
