According to data from Deribit derivatives exchange, the number of Bitcoin open interest options is increasing compared to put options.
According to Luuk Strijers, Chief Commercial Officer at Deribit, this indicates that investors are expecting prices of digital assets to rise in early 2024.
“This year, the Bitcoin put-call ratio has fluctuated between 0.4 and 0.5. We have observed a decline in the proportion of long maturities, which suggests clients are placing calls to position towards expirations in March and June 2024. “This suggests that they are being used more frequently. This trend is indicative of a longer-term bullish sentiment in the market, with the number of call options increasing compared to puts,” Strijers told The Block.
A put-to-call option ratio less than 1 means call volume exceeds put volume, indicating bullish sentiment in the market. Deribit’s put-call ratio today fell to 0.43, according to data from The Block’s data dashboard.
Deribit’s analysis is consistent with GreeksLive’s analysis of options. “Options data shows that put-call ratios are low, meaning that the main trading this week has been call options driven,” GreeksLive said. Posted At X.com.
GreeksLive analysis added that options traders are now betting on “an uptick focused on spot ETF approvals in January.”
Increased cryptocurrency derivatives activity
According to Strijers, November was one of the most active months for Deribit. He added that there has been increased activity in the overall cryptocurrency derivatives market. “This increased activity is reflected or caused by increased DVOL (implied volatility) levels, which in turn drives opportunities and overall market size,” Strijers said.
He said a significant amount of open interest is expected through the Dec. 29 expiration date of options for the upcoming month-end, quarter and year. “Current statistics show $5.7 billion in notional open interest in Bitcoin options and $2.7 billion in Ether options expiring at the end of December.”
An option is a derivative contract that gives a trader the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before a specific date. A call option gives you the right to buy, and a put option gives you the right to sell. Traders who buy call options are implicitly assumed to be bullish on the market, while put buyers are assumed to be bearish.
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