Bitcoin has continued to hit new all-time highs over the past few days, sparking investor interest, but some are also concerned about whether it is too late to join the game now.
However, Luuk Strijers, CEO of cryptocurrency derivatives exchange Deribit, noted that based on options market data, cryptocurrency derivatives traders look overwhelmingly bullish, betting that Bitcoin has more room to rebound.
According to Dow Jones Market Data, it hit an all-time high of more than $93,000 per coin on Wednesday and was still trading above $90,000 as of press time, up 151% over the past year.
According to Deribit data, for Bitcoin options expiring on December 27, the open interest in call options is about 79,216, about twice that of put options (about 39,505).
Open interest refers to the total number of undelivered derivative contracts for an asset. A call option gives the holder the right to buy the underlying asset at a certain price within a specified time, while a put option gives the holder the same right to sell. When the number of call options exceeds the number of put options, it is usually a signal that the asset price is bullish.
Meanwhile, for options expiring on December 27, call options with a strike price of $100,000 have the highest open interest, suggesting that investors are betting that Bitcoin could go as high as $100,000 by the end of the year.
According to Deribit data, for options expiring on March 28 next year, the open interest of call options is about 40,632, more than 170% higher than the 14,680 of put options. Among these options, the open interest of call options with strike prices of $120,000, $110,000 and $100,000 is the highest.
“They are positioning themselves for further gains,” Strijers said in a phone interview.
Sean Farrell, head of digital asset strategy at market research firm Fundstrat, agrees.
Farrell wrote in a recent report that while it is possible to see a temporary consolidation in Bitcoin, many of the signs that previously indicated a bubble are not present in the current market.
According to CoinGlass data, the annualized financing rate (i.e. leverage cost) of Bitcoin perpetual futures soared to 59% on November 12, the highest level since March this year, and fell back to around 12.9% last Friday.
However, Farrell noted that historical data shows that the rate can usually maintain levels of 20%-50% for several weeks before losing momentum.
“This level of leverage can persist as long as it is combined with capital inflows and strong spot demand,” Farrell said.
Article forwarded from: Jinshi Data
