Traders in the financial markets are always looking for signs of what’s to come. When a rising market fails to respond to positive news, traders may become cautious. However, this is not the case with Bitcoin’s options market. Despite choppy action following Wednesday’s softer-than-expected U.S. consumer price inflation (CPI) data, traders remain confident in the cryptocurrency’s price prospects.
Data from Amberdata shows that the call-put skews are still positive across all timeframes, indicating a persistent bullish bias. A call option gives the purchaser the right to buy an asset at a predetermined price on or before a specific date, an implicitly bullish outlook. A put option gives the right to sell. The call-put skew measures the spread between volatility pricing for bullish calls and bearish puts.
On Wednesday, traders snapped up Bitcoin calls expiring in December during the post-CPI price drop to nearly $30,200 from $31,000. This bullish flow was limited compared with the one seen during a similar price dip on Monday. The options market has been bullish on BTC since BlackRock’s June 15 application for a spot-based Bitcoin exchange-traded fund with the U.S. Securities and Exchange Commission.
Only about a third of the open options positions in the market are puts, highlighting that crypto markets remain biased, as they have for a long time, towards calls, Lawrence Lewitinn, a director at The Tie, wrote in Wednesday’s edition of the newsletter.
Analysts are confident that the rally will soon resume with more demand flowing in once prices top the $31,000 mark. Richard Usher, head of OTC trading at crypto payments services provider BCB Group, said, In BTC, a move above 31,400 and a close above 31,000 are needed to unlock further demand and gains. Paradigm voiced a similar opinion, saying prices could rise to $35,000-$37,000.