Kooner added that as the market attempts to break above the important psychological level of $50,000, many long-term bullish traders are buying these cheap call options with strike prices well above the current price of Bitcoin.
“These strike prices are significantly higher than in previous cycles,” he told The Block.
Bitcoin call options set to expire at the end of February are concentrated at strike prices above $50,000. Image: Deribit.
The concentration of Bitcoin calls above the $60,000 strike price suggests that a significant percentage of market participants have a particular interest or expectation that the Bitcoin price will rise above this level before the next month-end expiration date.
BTC Options Market Weighted on Buys
According to Kooner, the options market is heavily biased toward the buy side. A Bitfinex analyst said call spread positions are becoming more common in the derivatives market since Bitcoin crossed $48,000.
“The overall open interest spread is currently biased toward calls at a put-call ratio of 0.47. The overall market put-call ratio over the past 24 hours is 0.60. The ratio of 0.59 based on options expiring on February 23 extends the current trend.” He added:
A put-to-call option ratio less than 1 means call volume exceeds put volume, indicating bullish sentiment in the market. Traders who buy call options implicitly assume that they are bullish on the market, while put buyers are assumed to be bearish.
Bitcoin price fell below $49,000. Image: Block.
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