Mounting concerns about the state of the global economy and traders’ risk-off sentiment continue to weigh on Bitcoin price.
Goldman Sachs completes first OTC crypto options trade with Galaxy
Galaxy Digital previously facilitated the launch of Goldman Sachs’ Bitcoin futures trading product for CME Group in June 2021.
CME Group plans to launch micro-sized Bitcoin and Ether options
The futures options, expected to start trading on March 28, will come more than two years after the CME Group launched a BTC options trading product in January 2020.
Bitcoin Steadies At $37,000, But What Are Options Traders Doing?
Bitcoin price has been trending around $37,000 since it last broke out of the funk of the market crash. Since then, the digital asset has continued to record low momentum but bears and bulls look to remain in a tie for who will eventually move the price in their favor. While all of this is going on, bitcoin options traders have shown a clear picture of their hand, and by extension, their sentiment, as the market struggles.
Bitcoin Options Traders Are Wary
Since bitcoin options traders bet on the price of the digital asset, they have to play to volatility. Hence, when volatility is high, the traders are subject to more expensive options. Such is the nature of the game. However, at current market trends, options traders have not shown much faith in the market, indicating that the majority of these traders maintain bearish sentiment around BTC.
Related Reading | Bitcoin Inflows Suggest Institutional Investors Are Moving Back Into The Market
Bitcoin’s volatility skew is the highest it has been since May 2021, more than seven months ago. It is the difference in the prices of both put and call options and how expensive each one is for options traders. BTC’s call options have a tendency to be higher than put options but this is not always so. When this happens, the asset is more in a negative volatility skew.
Implied volatile down | Source: Arcane Research
Presently, as the volatility skew has risen to a seven-month high, the demands for puts have shot through the roof. This has flipped the historical trend of BTC put and call options as puts are now more expensive than calls. Simply put, BTC’s options traders are still bearish.
Implied Volatility Tell A Similar Story
The bitcoin implied volatility is usually derived from the option prices, which are currently very low. It helps to map out how traders are viewing an asset, especially their long-term outlook for the asset. When implied volatility is low, options prices fall. The same happens the other way around.
With implied volatility being low, it points to options traders being more bearish as they are wary of placing any directional bets in the asset. Instead, staying on the fence for the time being.
BTC settles at $37K | Source: BTCUSD on TradingView.com
For traders who are interested in being able to put in some cheap calls, the opportunity has presented itself as demand for put options has gone up. Nevertheless, options traders seem hesitant to take advantage of this opportunity.
Related Reading | Bitcoin Begins To Form A Bottom? Why $40K Is The Next Target
Bitcoin itself does not paint a particularly bullish picture on the chart. Although it has been able to dig itself out of the low $30,000s hole that the market crash left it in, it is yet to re-touch the $40,000 point. Coupled with the negative market sentiment that is prevalent, it does not look like bitcoin will be pulling upward soon. Although the reverse could very well end up being the case.
Featured image from CoinDesk, charts from Arcane Research and TradingView.com
Analysts say Bitcoin’s open interest wipeout ‘will give way to further upside’
Bitcoin’s drop to $42,000 obliterated its open interest and liquidated a large swath of leveraged traders, but analysts say OI resets typically provide great buying opportunities.
Bitcoin bulls risk losing $365 million upon Friday’s BTC options expiry
Nearly $3 billion in BTC options expire on Nov. 26, and bears are better positioned below $58,000.
3 reasons why Bitcoin’s drop to $56.5K may have been the local bottom
The absence of cascading liquidations, 25% delta skew and the margin lending ratio all suggest that Bitcoin price bottomed at $56,500.
Bitcoin has stalled, but here’s why pro traders still expect $80K by January
Bitcoin price is hitting resistance while trading 7.75% below its all-time high, but derivatives data shows pro traders are still aiming for $80,000 by January.
Friday’s jaw-breaking $3.2B Bitcoin options expiry could kick-start a new rally
Bitcoin bulls could be in for a $715 million profit if BTC price is above $60,000 ahead of Friday’s $3.2 billion options expiry.
Is excessive bullish optimism behind Bitcoin’s drop below $60K?
Bitcoin’s futures premium hit its highest level in 5 months, but was this the primary reason for BTC’s fall below $60,000?
Bitcoin bears risk getting trapped if BTC price remains above $50K — Here’s why
Hash rate, supply shock and U.S. credit risk are likely the causes for the BTC rally.
Bitcoin price is back at $50K, but exactly how ‘bullish’ are the bulls?
BTC’s futures markets premium and options risk gauge show that there are not any signs of excessive leverage or FOMO from traders — yet.
Bears intend to pin Bitcoin price below $42K until Friday’s $700M expiry passes
$700 million in BTC options expire on Friday, and derivatives data signals that bears are positioned to profit from a sub-$45,000 Bitcoin price.
Bears apply the pressure as Bitcoin price revisits the $41K ‘falling knife’ zone
Bitcoin traders say $43,600 needs to be regained to restore the bullish uptrend, but BTC futures and options data are showing signs of distress.
All bark and some bite. China’s Bitcoin ban puts traders in the ‘fear’ zone
Bitcoin derivatives markets flipped neutral-to-bearish after China’s ‘crypto ban’ announcement triggered a BTC price dip to $40,600.
Altcoin roundup: There’s more to DeFi than just providing liquidity
Bitcoin price is down but crypto investors still have a plethora of yield opportunities thanks to DeFi.
Key Bitcoin options ‘fear’ indicator reflects traders’ regulatory concerns
On Tuesday, SEC Chair Gary Gensler re-confirmed his plan to crack down on cryptocurrencies, and traders’ regulatory concerns are confirmed by this key Bitcoin futures and options indicator.
Binance to cease crypto futures and options in Australia
Binance users in Australia have 90 days to close their positions for futures, options and leveraged tokens.
Bitcoin bulls look to profit from Friday’s $195M BTC options expiry
$810 million in BTC options expire this Friday, and derivatives data suggests bulls are keen to push the price through the $50,000 level.
Bitcoin price flirts with $40K, but derivatives data is still bullish
Bitcoin is leaning toward the $40,000 level, but derivatives data shows traders are holding a neutral-to-bullish stance.