Key Points
- Bitcoin options maintain a positive put-call ratio ahead of the quarterly expiry at the end of June.
- Despite potential downside risks, market indicators show a continued bullish sentiment for Bitcoin.
Despite potential threats that could increase selling pressure on Bitcoin, the put-call ratio of Bitcoin options remains optimistic as the quarterly expiry approaches. This optimism persists even in the face of possible downside risks for the leading cryptocurrency.
Potential Downside Risks
There are several developments that could potentially increase selling pressure on Bitcoin. For instance, the Mt. Gox trustee has announced that repayments to creditors in Bitcoin and Bitcoin cash will begin in July. In addition, German authorities have seized 50,000 Bitcoin, valued at over $2.1 billion, from a piracy operation. Furthermore, U.S. spot Bitcoin ETFs have seen their seventh consecutive day of outflows.
Despite these pressures, derivative market indicators continue to display a sustained bullish sentiment for Bitcoin. This bullish sentiment is evident as Bitcoin approaches the weekly, monthly, and quarterly options expiry.
Bullish Sentiment Prevails
Analysts have noted that calls greatly outnumber puts, especially from $65,000 upward. This is likely a result of the bullish sentiment at the beginning of the month rather than the current situation. Notably, spot Bitcoin ETFs saw about $900 million in outflows last week, and there was a significant drop from recent highs.
Analysts have also highlighted the bullish put-call skew, noting a put-to-call ratio of 0.53 for the upcoming quarterly expiration at the end of June. This ratio indicates a higher number of call options relative to put options, suggesting a bullish sentiment among traders.
The options market is not anticipating increased volatility in July following the Mt. Gox creditor repayment announcement. Analysts have noted little activity in the July options market, suggesting the market is not anticipating volatility around the distribution itself.
Price action is likely to be limited in the short term but potentially bullish heading into the end of the year. Analysts have observed large selling of calls for expiries under 1-month and aggressive buying of calls for September through December. This aligns with the broader market sentiment, where traders appear to be positioning for a significant rally towards the end of the year.
Current options market positions indicate traders speculating on a Q3 recovery and Q4 price appreciation. Over $300 million on $100,00 strike price call options have been opened over the past week. This activity could suggest that traders are either hedging current short positions or selling spot in the short term.
At the time of writing, Bitcoin was trading at around $61,046, having traded flat in the past 24 hours. The price of Ethereum has increased over 2.5% to $3,365 in the same period. The global cryptocurrency market cap today is $2.38 trillion, dropping 1.1% in the last 24 hours.
