Bitcoin’s recent surge to a new all-time high has spurred options traders to increase their bets that the cryptocurrency will continue its upward trajectory, potentially reaching $US140,000. Bitcoin briefly surpassed $US126,000 for the first time on Monday (Tuesday AEDT), fuelled by bullish sentiment in the market.
Data from crypto derivatives exchange Deribit by Coinbase indicates significant open interest in short-term Bitcoin options contracts settling towards the end of the year, particularly around the $US140,000 strike price for calls. Simultaneously, there has been a moderate rise in demand for puts, as traders seek to hedge against potential pullbacks following the rally. Deribit by Coinbase is a cryptocurrency derivatives exchange that provides a platform for trading options and futures on cryptocurrencies. Coinbase is a cryptocurrency exchange platform that facilitates the buying, selling, and storage of digital currencies.
Greg Magadini, director of derivatives at Amberdata, noted the substantial open interest in Bitcoin futures and perpetual contracts, even after recent liquidations. “The market rally has caught people by surprise, we aren’t at the top yet, especially as many traders shorted this market,” Magadini stated. Bitcoin exceeded $US125,000 just after midnight Saturday in New York, with decreased liquidity contributing to the price surge.
Jean-David Péquignot, chief commercial officer for Deribit by Coinbase, advises monitoring volatility spikes and shifts in put volume as potential indicators of near-term corrections. “From here, watch for volatility spikes and any shift in put volume as a red flag for near-term corrections,” Péquignot said. “Bulls have their eyes on $US130K+, and bears might find opportunities in overbought squeezes.”
