According to CoinDesk: Bitcoin traders are buying bullish options bets at $65K or higher demonstrating an optimistic market sentiment, taking reminders from the 2020-2021 bull surge when calls were consistently bought at rates above the market. On the top crypto options exchange, Deribit, several calls at $65K, $70K, and $75K swapped hands over the weekend.
These purchases are for out-of-the-money calls, which are cheap and reflect bullish sentiments amidst fears of Bitcoin price declines due to overbought conditions and potential selling by the bankrupt crypto lender Genesis.
One options contract on Deribit represents one BTC. This recent bullish flow is similar to the 2020-2021 bull market when market participants regularly purchased calls at strikes at $80,000 or above at low valuations.
BTC has almost doubled in value to $50,000 since the beginning of October. Prices surged from $38,500 within the last three weeks, mainly due to strong ETF inflows. The cryptocurrency’s 14-day relative strength index has risen above 70, thoough this typically indicates an overbought market which could reflect an imminent bearish trend reversal.
Despite this, Kelly Greer, Head of Americas Sales at Galaxy, suggests the market believes strongly in Bitcoin and is willing to pay premiums for these positions. The similar concentration of out-of-the-money calls at $30,000 and $40,000 in Q4 2023 led to a convincing price rally at those stages.
