The demand for Bitcoin calls at $100K indicates traders are gearing up for a renewed rally into 2025. Crypto options traders strategically place bets that contrast with the ongoing downtrend in Bitcoinโs (BTC) price.
Also Read: Germanyโs Bitcoin sell-off ushers in the weekend market decline
In the past 24 hours, the leading crypto by market value has declined over 1% to $64,500, continuing its pullback from recent highs near $72,000. Despite this, bitcoin options on leading exchanges, such as Deribit, have preferred call options at strike prices well above the current market rate. This trend suggests that sophisticated investors expect the current price weakness to set the stage for a more substantial rally.
In the options market, weโve observed a substantial buying flow of December and March $90K-$100K calls in the last 24 hours. This indicates the market is calling the bottom and positioning itself for a sustained rally that could extend into 2025.ย ย
Singapore-based QCP Capitalย
Sophisticated investors signal bullish outlook
A call option gives the purchaser the right, but not the obligation, to buy BTC at a predetermined price at a later date, implicitly signaling a bullish market outlook. Recent data shows the most active bitcoin options on Deribit over the past 24 hours have been June expiry calls at $65,000, $68,000, and $70,000, a July expiry call at $110,000, and a December expiry call at $95,000.
Also Read: Bitcoin faces an โextended level of FUDโ โ Santiment reports
The divergence between options market sentiment and Bitcoinโs price is particularly evident in the call-put skew, which reflects what traders are willing to pay for an asymmetric payout in either direction. According to Amberdata, the one-, two-, three-, and six-month skews have remained consistently positive during the recent BTC price pullback, indicating a bias toward calls or upside. Only the seven-day skew has turned negative, suggesting a demand for downside protection.
Bitcoin decouples from Nasdaq amid market turbulence
Bitcoin has decoupled from Nasdaqโs uptrend in recent weeks, mainly due to long-term holders and miners selling coins and increased discussion about the non-directional nature of ETF inflows. Additionally, on Thursday, the German government moved BTC worth $425 million to some cryptocurrency exchanges, likely with the intention of selling.
When a market continues to sell off at a specific level, it has less to do with events, narratives, or fundamentals. Instead, a large seller perceives prices to be overvalued at that level. The November 2021 all-time high of nearly 70,000 is a level where long-term holders are eager to sell their Bitcoins, as they are the most likely candidates to cash out.
Markus Thielen, founder of 10x Research
BTC has reacted negatively to the sell off, which led to profits gain wipe-out in the hours following. Germany joins the US in selling BTC they have confiscated in combatting crime.
Inactive wallets moving BTC
Earlier this week, a wallet that had been dormant since 2018 moved 8,000 BTC worth over $500 million to the crypto exchange Binance. A move from a wallet to an exchange often signals an impending sale. The wallet reportedly acquired the BTC at less than $4,000. Data from analytics firm CryptoQuant shows that the number of BTC inactive for at least 12 months and two years has declined, a sign that holders are taking profits as the bitcoin price holds near record highs.
Ilan Solot, co-head of digital assets at Marex Solutions adds that, โAddresses with supply inactive for 1 and 2 years have been selling since the price hit a record high. This is offsetting accumulation by longer-term holders (over 3 years).โย
According to Thielen, 1.8 million BTC have not moved for over a decade, potentially including the 1.1 million BTC mined by Satoshi himself. โThis is why we would also expect that most of the Mt. Gox holders will convert their BTC into fiat once they take possession of their BTC in October/November 2024,โ Thielen noted.
Mt. Gox, a crypto exchange that collapsed following a hack in 2014, is preparing to distribute 142,000 BTC (worth approximately $9.5 billion) and 143,000 Bitcoin Cash (BCH) (valued at $73 million) to creditors. This distribution could create significant downward pressure on digital asset prices. The trustees of the defunct exchange have set an October 31, 2024, deadline for reimbursing creditors.
Cryptopolitan Reporting by Florence Muchai
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