The crypto market is currently under tension ahead of the US Securities and Exchange Commission’s upcoming decision on the first Bitcoin ETF. Amid divided opinions on whether the SEC will approve the ETF in the coming days or delay the decision again, a close analysis of Deribit’s Bitcoin options market shows traders are bracing for significant price moves in January.
As of January 5, the total open interest in Bitcoin options on Deribit is 228,646.70 BTC, representing a notional value of $10.05 billion. This substantial figure indicates a high level of market participation and interest in Bitcoin’s future price movements.
The dominance of call open interest, consisting of 162,694.50 BTC compared to put open interest of 65,952.20 BTC, indicates bullish sentiment among investors. They appear to be anticipating or hedging against a possible rise in the price of Bitcoin.
The breakdown of open interest by strike price further reinforces this bullish sentiment. The highest concentration of call options is at the strike price of $50,000, with a value of $1.05 billion. This level can be seen as a key psychological and financial threshold that many investors are betting Bitcoin will reach or surpass. The next highest concentration is at the $45,000 and $60,000 strike prices, indicating optimism for even higher prices, albeit with less conviction than for the $50,000.
In terms of open interest per expiration, the data shows a strong concentration of call options for the January 26 expiration, with $2.21 billion in calls versus $988.49 million in puts. This suggests that bullish sentiment is more pronounced in the medium term, with much of the market expecting significant developments around the Bitcoin ETF to occur before this date.
The regular trading distribution, which shows almost equal percentages of bought and sold puts and calls – 17.8% and 17.9% for puts, 32.1% and 32.2% for calls, respectively – indicates a balanced market in terms of trading activities. The data shows that a higher percentage of market participants are involved in call option transactions than in put transactions. This indicates a stronger interest in betting or hedging against a rise in the price of Bitcoin. The balance between bought and sold calls is also almost equal, indicating that for every investor speculating on a price increase (by buying calls), there are almost an equal number of investors (or perhaps the same investors in different trades) who either be cautious or want to make a profit from selling these options.
Data from Deribit reflects a largely bullish sentiment, with investors showing strong belief in the potential for a rise in Bitcoin’s price, especially towards the $50,000 level in the short to medium term. However, a significant number of put options and balanced trading activity indicate a cautious approach among traders, with many preparing for further volatility.