Although Bitcoin (BTC) continues to hit all-time highs, reaching $107,000 at the time of writing, and several publicly listed companies in the US are continuing to accumulate Bitcoin spot purchases. However, the latest options market trend shows that traders are not following the upward momentum with the same fervor as before.
On Monday, the price of BTC rose above $107,000, breaking the previous peak of December 5, resulting in a cumulative increase of over 50% since the US elections.
This surge is attributed to President Donald Trump's support for cryptocurrencies and his campaign promise to establish a 'Bitcoin Strategic Reserve' similar to oil reserves. Several analysts expect this upward trend to continue into next year, with prices projected to reach between $150,000 and $200,000 by the end of next year.
However, the current pricing of Deribit options trading shows that traders are not chasing the upward trend as they did in the past, indicating that their trading strategies are more cautious in the short term.
According to CoinDesk reports, the options data expiring on Friday shows that put option prices are slightly more expensive than call options, indicating that the market is more concerned about a price drop in the short term. Similar situations are seen in options expiring on December 27, where investors are more willing to pay extra costs for downside protection. As for the options expiring at the end of March, although there is still some bullish sentiment, the price difference has narrowed, and the market is no longer as aggressively bullish as before.
This contrasts sharply with trends from the past few weeks, when traders actively pursued new price highs, pushing short-term and long-term bullish biases beyond four to five volatility points. In fact, short-term risk reversals often show stronger bullish bias than long-term risk reversals.
According to the latest block trade data tracked by Amberdata on Deribit, there are also signs of bearish tendencies. The largest trade so far today is a short position on call options expiring on December 27 with a strike price of $108,000, followed by long positions on put options expiring on December 27 and January 3 with a strike price of $100,000.
However, this cautious trading sentiment may also be due to market concerns about the Federal Reserve releasing negative news about slowing the pace of interest rate cuts in 2025 on Wednesday, despite the market generally expecting a 25 basis point rate cut announcement. Such an outcome could accelerate the rise in bond yields, bolster the dollar, and weaken investments in risk assets. Therefore, some traders may be positioning themselves for a potential market correction.
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