As bitcoin’s price surges to over $92,000, strategic investors are turning to long-term BTC holdings via put options trading, collecting premiums while expressing bullish sentiment.
There is a notable increase in cash-secured put selling using stablecoins, according to Lin Chen, Deribit’s Asia Business Development Head. This strategy allows traders to collect premiums while potentially accumulating ‘bitcoin’ if the options are exercised.
Traders are implementing this approach in a cash-secured manner by holding a corresponding amount in stablecoins, ensuring they can buy ‘BTC’ if the market declines and the put buyer decides to exercise their right to sell ‘BTC’ at the predetermined higher price. This strategy enables traders to express long-term bullish sentiment while collecting premiums.
Key Indicators of Bullish Sentiment
The cumulative delta in Deribit’s BTC options and related ETFs reached $9 billion, highlighting significant sensitivity to changes in ‘bitcoin’s’ price. The data indicates heightened sensitivity of options to changes in BTC‘s price, suggesting potential for price volatility.
Bitcoin options are a financial derivative that allows traders to buy and sell contracts based on the price of Bitcoin.
These contracts give the buyer the right, but not the obligation, to purchase or sell a certain amount of Bitcoin at a predetermined price.
Bitcoin options can be used for hedging against potential losses or gains in the market, as well as for speculating on future price movements.
The main types of Bitcoin options include call and put options, with call options giving the buyer the right to buy and put options giving the right to sell.
Delta measures how much the price (premium) of an options contract is likely to change in response to a $1 chance in the price of the underlying asset, in this case, ‘BTC’. A cumulative delta of $9 billion represents the total sensitivity of all outstanding BTC and bitcoin ETF options to changes in the spot price.
Market Trends and Insights
“bitcoin’s” price has risen to over $92,000 since the early month slide to $75,000, supposedly on the back of haven demand and renewed institutional adoption narrative. The sharp price recovery has seen BTC options risk reversals reset to suggest a bias for call options across time frames.
Traders have specifically snapped up calls at strike prices $95,000, $100,000, and $135,000 via the over-the-counter tech platform “Paradigm”. As of writing, the $100,000 strike call was the most popular option play on Deribit, with a notional open interest of over $1.6 billion.
Market Analysis
The data tracked by Volmex indicates that crypto-native options traders over Deribit are positioned more bullishly than those trading options tied to “IBIT”. This suggests that traders are becoming increasingly bullish on ‘bitcoin’s’ long-term prospects.
