In the complex world of financial trading, seemingly insignificant blips in trend lines can signal the avalanche of a major shift in fortune – particularly within the volatile sphere of cryptocurrency. One enigmatic paradigm to consider is bitcoin’s recent insouciance in face of optimistic news, which has prompted speculation of an imminent downtrend by traditional metrics. However, it seems such trepidation may be misplaced, as the currency’s options market sings a sanguine tune.
Derisively known as the crypto option behemoth, Deribit exudes a palpable, positive call-put skew across all scales, indicative of an abiding bullish sentiment confirmed by the folks Amberdata. Option trading can be a barometer of market sentiment – a call reflects a bullish forecast while a put predicts a bearish outcome. Despite the recent choppy price trajectory in the aftermath of the damp U.S. consumer price inflation (CPI) data, the call bias remains unbroken.
Traders on the institutional liquidity network, Paradigm, have been latching on to bitcoin calls expiring in December, in the wake of the recent price deflation to around $30,200 from $31,000. Yet this bullish vigour was less pronounced than the flurry during an analogous dip earlier in the week.
The vivacity in the option market skyrocketed in mid-June following the application by BlackRock for a spot-based bitcoin ETF with the U.S. SEC. Bitcoin has enjoyed an approximate 20% rally since. According to Lawrence Lewitinn, a director at The Tie, the market’s open option positions display a discernible inclination towards calls, a significant indication of market expectations.
Conversely, bitcoin’s muted response to the recent CPI data has raised eyebrows. Some attribute the surprise lethargy to the movement of coins formerly impounded from Silk Road the notorious darknet marketplace.
However, the optimism in the crypto community remains undeterred despite the recent trends. Richard Usher, head of OTC trading at crypto payment service provider BCB Group, and Paradigm both predict a revival of the rally soon, with prices expected to breach the $31,000 barrier – ushering in further momentum.
In conclusion, despite the cryptic narratives spun by recent trends, the bullish sentiment continues to prevail in the crypto options market. As the eyes of traders are transfixed on the $31,000 mark, the scene could be set for bitcoin’s next grand performance. Whether the curtains shall rise to thunderous applause or fall before an empty house remains to be seen.
Source: Coindesk
