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Cryptocurrency News Articles
Bitcoin Options Market Stays Bullish Despite Market Volatility
May 07, 2024 at 11:39 pm
Amid market volatility, a bullish trend emerges in Bitcoin options, with calls outnumbering puts. Despite a brief dip, Bitcoin options expiring in May reflect a positive outlook, with approximately 28% of the volume attributed to puts that are now unprofitable due to price recovery. Longer-term options contracts expiring in September continue to be dominated by calls, indicating a sustained bullish sentiment towards higher prices.
Bitcoin Options Market Remains Bullish Amidst Market Volatility
Introduction
Recent market volatility has not diminished the bullish sentiment in the Bitcoin options market, according to data from leading crypto analytics firm Kaiko. Calls, which provide the right to buy Bitcoin at a specified price, continue to outnumber puts, signaling an overall optimistic outlook among market participants.
Impact of Price Volatility
Last week's Bitcoin price dip briefly benefited put options expiring in May. These options, which grant the holder the right to sell the underlying asset at a predetermined price, saw increased profitability as Bitcoin dropped below $57,000.
However, as Bitcoin recovered above $64,000, these put options became unprofitable, while call options in the $60,000 to $65,000 range returned to profitability. Notably, over $600 million worth of call options with a strike price of $80,000 remain out of the money, indicating that they will only become profitable if Bitcoin's price exceeds $80,000.
Long-Term Bullish Outlook
Despite the shift in profitability, calls continue to dominate the market in terms of volume. This suggests a bullish outlook among market participants, who anticipate Bitcoin's price to remain elevated in the long term.
Options contracts expiring in September are particularly bullish, with a large majority being call options. The most popular strike price for these contracts is $65,000, indicating that market participants expect Bitcoin to maintain a price above this level by the end of September.
Leverage Dynamics in Altcoins
While the recent market correction has impacted the value of many altcoins, the influence of leverage in the market remains evident. Meme coins such as Pepe (PEPE) and Dogwifhat (WIF) have maintained high leverage ratios, double that of other altcoins within the top 30 by market capitalization.
Filecoin's FIL token, which experienced a rally after its integration with Solana, has also seen significant leverage. Bitcoin Cash (BCH) is another notable altcoin with high leverage.
Derivative Market Influence
Derivatives markets, particularly in the cryptocurrency space, can significantly influence asset prices. The ratio of open interest to market capitalization provides an indication of the extent to which trading activity in derivatives markets affects asset prices.
Higher ratios suggest that prices are heavily influenced by trading in derivatives markets, rather than by other factors such as technological advancements or industry developments.
Conclusion
The Bitcoin options market remains bullish despite recent market volatility, with calls continuing to dominate and indicating an optimistic long-term outlook. Additionally, leverage in the altcoin market, particularly in meme coins, remains elevated, highlighting the influence of speculative trading in this segment of the cryptocurrency ecosystem.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
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