Key Points
- Significant purchases of Bitcoin call options suggest potential price breakout above $74,000 in June.
- Interest rates could influence the sustained institutional demand for Bitcoin.
Recent acquisitions of Bitcoin call options with a strike price exceeding $74,000 set to expire in June have led market observers to speculate that many investors are wagering on a price increase beyond $74,000 by the end of the month.
Analysts at QCP Capital have observed strong bullish momentum with substantial buying of Bitcoin call options for June expiry. This indicates market positioning for a definitive break above $74,000 record highs this month.
Bitcoin Options Centered at $75,000 Calls
Data from the Deribit derivatives exchange reveals that the most significant cluster of Bitcoin options open interest for June’s end-of-month expiry are calls at a strike price of $75,000.
Moreover, on Wednesday, the highest trading volume on Deribit was seen in calls with a strike price of $80,000 for the end-of-June expiry, totaling 1723 contracts and a notional value surpassing $123 million.
Interest Rates Could Influence Institutional Demand for Bitcoin
Stocklytics analyst Neil Roarty attributes Bitcoin’s bullish trend, nearing its peak price of over $73,000, to increased inflows from spot Bitcoin ETFs.
He highlighted that this week’s surge in inflows is indicative of a significant increase in institutional demand. However, he also noted that whether this demand increase can be maintained will be contingent on the macroeconomic outlook for crypto.
“The question now is whether these institutional investors will remain bullish. That will be closely linked to interest rates. If we see cuts sooner rather than later, the strong returns Bitcoin has been delivering lately could look even more appealing versus more traditional – and perhaps safer – investments. As always seems to be the case with Bitcoin, the only guarantee is that we’re in for an unpredictable ride,” Roarty stated in an email.
An economy closely tied to the U.S. has recently initiated interest rate reductions. On Wednesday, the Bank of Canada cut its overnight rate by 25 basis points to 4.75%. The central bank in Ottawa expressed that it was “reasonable” to anticipate further cuts as they have confidence in controlling inflation.
At the time of reporting, Bitcoin was trading at approximately $70,750, having increased over 1.3% in the past 24 hours.
