The Bitcoin (Bitcoin) options market is dominated by Deribit and the Chicago Mercantile Exchange (CME). Recently, it said that by the end of 2020, Bitcoin had a 9% chance of rising to a historical high of $ 20,000.
Considering that Bitcoin has continued to rise in the 6 to 8 months after the halving occurred, traders in the options market are relatively cautious about the medium-term trend of Bitcoin.
Data shows that the BTC options market tends to be long
Recently, many traders are optimistic about the price trend of Bitcoin on Deribit and CME.
According to ecoinometrics data, the Chicago Mercantile Exchange Bitcoin Options Exchange recorded 22 call options for every sold option. In short, every 22 people buy bitcoin, there is a selling coin.
Option traders’ optimism about Bitcoin’s short-term price movements may be based on continuous testing of the $ 10,000 resistance level.
When a key level is tested three to four times, whether it is support or resistance, it has a high probability of being broken. In the past 11 days, Bitcoin has tested a total of 5 times 10,000 US dollars, weakening the resistance level.
Option traders are mostly professional traders, and they expect the price of Bitcoin to exceed $ 10,000 in the short term, which is also supported by improved sentiment around high-risk assets such as single stocks.
Why can’t traders be bullish for a long time?
Bitcoin prices tend to fluctuate in extreme cycles. For a long time, people have speculated that the active buying and selling behavior of big whales at highs and lows will lead to large fluctuations in Bitcoin prices.
Due to the unpredictability of Bitcoin in the current situation, options traders may be reluctant to make long-term bets on Bitcoin prices.
In the previous halving, the price of Bitcoin took about six to eight months to start rising continuously. Therefore, halving the price in May 2020 alone does not guarantee that the price of Bitcoin will reach the highest level in history at the end of this year.
Having said that, there is still some positive data to support the prediction that Bitcoin prices will reach record highs in the fourth quarter of 2020.
For example, if the price of Bitcoin stays above $ 9,500 in the next few days, Bitcoin will soon usher in the seventh golden cross in history.
Bitcoin is also far from showing oversold conditions at a higher time period. The weekly chart shows that various momentum oscillation indicators show that the current rally may be further extended to the range of 10,000-11,000 US dollars.
The Golden Cross and MACD are relatively short-term indicators and may be the catalyst behind the optimism in the options market.
At present, a combination of factors, including Bitcoin’s volatility in a highly uncertain environment, such as the current volatility caused by the coronavirus pandemic, seems to cause option traders to become more prolonged on long-term call options cautious.