As Bitcoin Falls To $ 59,000, Some Traders Believe It Has Even More Room For Growth Through Year End
- Rise in open interest
- Do Traders Really Believe Bitcoin Reaches $ 100,000?
Bitcoin options open spikes in interest as volatility in the cryptocurrency market rises rapidly. More and more traders are betting on Bitcoin calls of $ 100,000, but that doesn’t necessarily mean they believe the currency is reaching that price.
Rise in open interest
Options expiring Dec.31 faced a sharp increase in open interest after Bitcoin quickly fell to $ 59,000. Open interest on options is primarily distributed to calls rather than puts.
Call options are an alternative way to bet on the specified price of the asset. According to the data provided, traders mainly bet on call (buy) options with strong dominance.
For options expiring December 31, 2021, we can see a huge dominance of call options.
The #Bitcoin bulls bet big, with large interest groups open at strike prices of:
– $ 100k (OI = $ 500M)
– $ 120k (OI = $ 420M)
– $ 200k (OI = $ 380M)
– glassnode (@glassnode) November 17, 2021
The current open interest on the $ 100,000 appeals remains at $ 500 million, in addition to the $ 200,000 appeals with an open interest of $ 380 million. In total, traders have bet over $ 1.3 billion on Bitcoin, rising to $ 100,000 by the end of the year.
Do Traders Really Believe Bitcoin Reaches $ 100,000?
While options were originally conceived as contracts that allow you to receive the right but not the obligation to buy an asset for a predetermined price, experienced traders tend to avoid these risks and use the options differently.
Among professional traders, options are used to hedge positions in spot or derivative markets. When traders have large open short positions, analysts can open options contracts by paying a relatively low fee, which they will lose if the price of the underlying asset does not reach the strike price. .
In this specific case, traders could have opened short positions in the market and hedged them with call option contracts. But according to open forward interest rates and market funding data, there are currently no traceable numbers of open short positions in the market, which means traders are, in fact, betting on future growth. of Bitcoin.