Crypto Options Traders Betting on Bitcoin’s Reversal

Crypto options traders are strategically placing bets that diverge from the ongoing downtrend in bitcoin’s (BTC) price. In the past 24 hours, the leading cryptocurrency by market value has declined over 1% to $64,500, extending the pullback from recent highs near $72,000, according to CoinDesk data.

Despite the price decline, the flow in bitcoin options listed on leading exchange Deribit has shown a bias toward call options at levels (strikes) well above the cryptocurrency’s current market rate. This may indicate that sophisticated investors expect the ongoing price weakness to pave the way for a more extensive rally.

Market Sentiment and Activity

QCP Capital, based in Singapore, noted an increased buying flow of December and March expiry $90-$100K calls in the last 24 hours. This suggests that the market is anticipating a trend reversal and positioning for a sustained rally that could extend into 2025.

In the options market, the most active bitcoin options on Deribit in the past 24 hours have been concentrated in June expiry calls at $65,000, $68,000, and $70,000, as well as July expiry call at $110,000 and December expiry call at $95,000.

• Bitcoin call-put skews: Per Amberdata, the one-, two-, three-, and six-month skews have remained consistently positive during the recent BTC price pullback, indicating a preference for calls or upside. Only the seven-day skew has turned negative, signaling demand for downside protection.

Bitcoin has recently decoupled from Nasdaq’s uptrend, with long-term holders and miners selling coins and discussions emerging about the non-directional nature of ETF inflows. Notably, the German government transferred BTC worth $425 million to some cryptocurrency on Thursday, likely for selling purposes.