Bitcoin Price and the Bullish TrendsDavid Kemp
This month has shown a one-thousand-percent rise – thanks to institutional investors the current BTC positions have turned bullish. Now experts are trying to predict the BTC’s sport price.
Options markets have started working with CME. The mass media have lately reported that in the past two weeks, the overall volume exceeds one hundred and forty million USD. Without investors delving in various call options this would not be possible to achieve.
This opportunity allows a buyer to purchase BTC. People purchase the crypto for a predetermined price and they know the exact date. To have such an offer, the buyer pays a premium and he does it for the seller. Let us remind you there was some uncertainty. However, once the halving proved there the risk is lower, investors started to establish bullish positions. We admit that options markets can be less intricate than trading linked to futures, yet they let users leverage their positions with no risk related to liquidation.
Interest and Possible Risks
Traders need a comparatively relevant metric and open interest is one of such options. It’s the overall amount of contracts belonging to market participants. If call options worth seventy million USD are traded this week and, afterwards, reverted the next week, then both would have to close out. Despite one hundred-forty million USD, open interest in this case would equal zero.
What the latest data show is that any of the positions hasn’t yet been closed till now. The actions were mostly short-term. Nowadays CME markets stand out and feel different. The reason is in its minimum, which is 0.10 BTC, while CME requires five BTC.
Can Trades Meet Buyer’s Hopes?
The current trades may serve as indicators of the bullish trend. We see how professionals influence the trend and make the total sum more than five million USD. It is not though clear how many customers participated in the process.
We can assume that such investors create positions that are short-term and look bullish. It’s possible to deliver CME contracts, which means BTC futures contracts will reach the buyer. Investors have the right to sell their futures, considering the market liquidity is pending. This buying movement proves a possible long-term market trend.
Expectations That Sellers Have
Selling options in return for an indicated upfront and, at the same time, have unlimited downside is rather unreasonable. The strategy seems to be able to reshape, especially if the paericipant used to own BTC or gained exposure through CME futures. The described approach is widely used. This way lets the investor determine a maximum for its gain. It would impact the entry cost and its average would see a reduction. This trade is bearish and is usually short-term. Despite this, the bet is not leveraged.
Keeping Track of the BTC price
Traders focusing on retail know that CME lives according to its expiry calendar. Awareness of the ratios and developing strategies for options is another important aspect. The indicator has reached one of the lowest marks due to the movement occurring at CME. At present, call options rule almost ninety percent of open interest. Statistics show that Skew measures represent BAKKT along with LedgerX. The list includes CME, there you can see OKEx as well as Deribit.
The incentive for this kind of call options is quite impressive and most buyers are willing to increase BTC price when the expiry comes to an end. Sellers cannot have any gain if and when they try to push the market and set it further from the strike price. We see that option markets may gain relevance. In this case, there would be potential incentives for even more pressure on the price nearing each expiry.
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