Key Points
- Bitcoin options are reflecting bullish sentiment, pricing calls higher than puts for June 2024.
- Despite recent price drops, the market is still in line with previous halvings, expecting a positive price impact over time.
Bitcoin Options Reflect Bullish Market Sentiment
The positioning of Bitcoin options is showing a bullish trend, similar to previous halvings. The market is pricing calls higher than puts for the end-of-June 2024 expiry, according to an analyst.
A put-call options ratio below one signifies that the call volume exceeds the put volume, indicating bullish sentiment. The Bitcoin put-call skew is negative from May onwards, implying that calls are relatively more expensive and thus signaling bullish sentiment.
Impact of Bitcoin’s Halving
Despite recent price drops, the composition of Bitcoin options aligns with previous halvings. The positive price impact is expected to take time to materialize. The market has not turned bearish, according to Luuk Strijers, CEO of Deribit.
Strijers pointed out that Bitcoin, being a high-risk asset, is sensitive to macroeconomic events and unrest, which could create short-term downside pressure. However, he emphasized that the market is still pricing calls higher than puts for June 2024.
Analysts from QCP Capital have observed concentrated selling of Bitcoin calls at a strike price of $80,000 for the end of May. However, Strijers views this as a result of a recent reduction in the basis yield, which could have affected derivatives traders holding high strike price calls.
Change in Market Sentiment
Analysts from Bifinex have noted a shift towards selling these high strike price calls, indicating that earlier bullish sentiment may be waning. This shift could be a response to a variety of market factors, including significant intra-day declines in multiple large-cap equities in the current earnings season.
The options market is showing signs of reassessment, with participants possibly revising their expectations and taking profits or cutting losses ahead of the summer.
On Friday, $6.2 billion out of $19.2 billion Bitcoin options in current open interest will expire. The implied volatility of Bitcoin is trading at 58, the lowest it has been in two months. The largest digital asset by market cap is trading above the $64,000 mark, having increased by 1.4% in the past 24 hours.