- Traders buy Bitcoin options at $65,000 and above, reflecting optimism and expectations of surpassing the all-time high of $69,000.
- Bitcoin nearly doubles in value to $50,000 since October, driven by strong ETF inflows and overbought RSI signals.
Recent buying of Bitcoin options at prices of $65,000 and above indicates a bullish mood in the market, reminiscent of the 2020-2021 bull period when traders were consistently acquiring Bitcoin options at levels well above the current market rate.
Over the weekend, several call options were traded at $65,000, $70,000 and $75,000 on Deribit, the world’s leading crypto options platform by volume and open interest, reflecting a positive expectation among market participants.
This concentration of activity in “out-of-the-money” call options underscores a positive mood, leaving behind fears of a potential drop in Bitcoin’s price due to overbought technical conditions and potential selling by Genesis, a bankrupt crypto lender .
Traders are buying cheap call options at levels near Bitcoin’s all-time high of $69,000, showing confidence in the continuation of the uptrend.
On Deribit, one options contract represents one BTC, and the massive purchase of call options at higher prices reflects an optimistic mood among more sophisticated investors .
According to Kelly Greer, Head of Americas Sales at Galaxy, the concentration of open interest in $50,000 options and activity in $50,000, $60,000 and $75,000 options for April through June expirations indicate conviction on the part of buyers, showing a positive outlook on Bitcoin.
This position in the options market has been a reliable indicator of future price changes. Current optimistic flows are reminiscent of the 2020-2021 bull period, when market participants were consistently buying call options at prices of $80,000 and above at cheap valuations.
Bitcoin has nearly doubled in value to $50,000 since early October, with prices surging from $38,500 in the past three weeks, driven primarily by strong ETF inflows.
Bitcoin’s 14-day Relative Strength Index (RSI), a popular technical analysis tool, has surpassed 70, indicating overbought conditions in the Bitcoin market.
While an overbought reading is often interpreted as signaling an imminent shift to a downtrend, it simply means that the market has advanced rapidly in a short period and could pause.
The release of Bitcoin’s seventh consecutive day of gains, although the rise slowed over the weekend, coincides with a move above 70 on the RSI on daily time frames, which could incentivize short-term profit-taking among investors.
