+0.49%
The majority of options traded in the last 24 hours were call options, with only 60% being calls and 40% being puts. A call option gives the trader the right, but not the obligation, to purchase the underlying asset at a set price by a future expiration date. Traders who buy call options are implicitly assumed to be bullish on the underlying asset, while put buyers are assumed to be bearish.
Bitcoin options open interest has hit an all-time high, according to Coinglass data.
Most of Bitcoin’s open options are currencies.
If we examine important monthly options expiring on January 26, 2024, most of them are call options. Of these call options, the one with the most volume over the past 24 hours has a strike price of $50,000, according to Velo Data. A widespread call at this particular price means that traders expect a price increase above this level for the underlying asset in early 2024.
The next most traded group of public options consists of call options with a strike price of $45,000, indicating that traders are protecting themselves from a potential price decline. However, there is $75,000 worth of the currency, which means some traders are expecting the Bitcoin price to rise significantly in early 2024.
According to Velo Data, most active Bitcoin options are $50,000 calls expiring on January 26.
What’s Driving BTC’s Recent Rally
According to Bitfinex analysts, there are four main factors driving the latest Bitcoin rally. Analysts cited the upcoming Bitcoin halving, the potential approval of a spot Bitcoin ETF, El Salvador’s growing Bitcoin bet, and the possibility of a Federal Reserve interest rate cut in 2024.
“The Bitcoin halving, expected in April 2024, has traditionally led to a rise in prices due to a decrease in the supply of new coins. This event is associated with a supply shortage, pushing prices higher. The fact that the highest supply is currently inactive Combined with this, statistics, especially for long-term holders, show that this effect is already being seen,” Bitfinex analysts said in a note to The Block.
Analysts added that approval of a spot Bitcoin ETF could open the door to a surge in institutional investment. “The potential impact of institutional funds on the price of Bitcoin could be significant. Additionally, the ETF is expected to become active several months after approval, which means the window for speculation increases following such bullish announcements,” Bitfinex said. the analyst said. he said
Bitcoin adoption in El Salvador and further adoption by other countries or major corporations could also strengthen the digital asset’s value and credibility, according to Bitfinex. “Argentina’s election of a head of state who supports Bitcoin is the biggest step forward for an economy struggling with inflation,” the analysts added.
Lastly, the Bitfinex note said that if central banks start cutting interest rates globally, it could make riskier asset classes like cryptocurrencies more attractive. “Monetary policy, cryptocurrency price trends and monetary policy are very highly correlated in 2022-23,” Bitfinex analysts said.
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