In what cements the current Bitcoin sentiment and expectations for better prices, an analysis of Bitcoin options’ Put and Call ratio, reveals that there are more buyers, Calls, that Puts, sellers.
The ratio of Puts versus Calls positions placed in leading derivatives platforms including BitMex, is less than one meaning there are more bets for higher prices than the expectation of a price downturn in days ahead. This is according to a review by Skew, an analytics platform.
Calls More than Puts, a Boon for BTC Bulls
From this, it is evident that Bitcoin, which is currently trading above $9,000, could edge higher since there is enough gas to sustain the current bull momentum.
New sentiment indicator ?
Bitcoin Options Open Interest Put-Call Ratio
Ratio > 1 means more puts than calls open
For bitcoin it is structurally < 1 & correlated with the market pic.twitter.com/jx5CYVK6kV
— skew (@skewdotcom) January 28, 2020
Regulators have approved the trading of Bitcoin Options. These are derivatives products that gives traders the right but not the obligation to buy the underlying asset.
The wider the premium say of Calls–like when it happened in Q4 2019, the higher the expectation of better prices and the higher the chances of the underlying assets, that is, BTC rallying.
Judging by the market activity today, 2020 is shaping up to be an interesting year for BTC. Call options seeing by far the most volume today.
Top 3 options:
BTC-27MAR20-9000-C 3.77 Mil
BTC-27MAR20-10000-C 3.75 Mil
BTC-3JAN20-7500-C 3.59 Mil pic.twitter.com/6Yj1uFZNK1
— Deribit (@DeribitExchange) December 30, 2019
With this preview, buyers are optimistic. This has subsequently spilled on to the charts where bulls are in the driving seat and shaking off sellers at a key support line.
At the time of press, BTC is changing hands at $9,090, adding an impressive 23% in the last trading months. Notably, prices are trading above a key resistance level.
In a breakout, it is highly likely that bulls will build on the sharp upturn of the first half of January and rally towards $12,000 or better by the end of Q1 2020.
Bitcoin (BTC) Halving isn’t Priced
From the daily chart, BTC is reversing from within the 38.2-50% Fibonacci retracement levels, an important reaction point, and the middle BB, a flexible support line that has rebuffed sell pressure for the better part of January.
With improving sentiment and supportive fundamentals and technical candlestick arrangement from the top-down, BTC buyers stand a chance.
Analysts are also positive that the May 2020 halving, a scheduled event where miner BTC rewards will be slashed by half, hasn’t been priced in by market participants.
Please tell me again how ~$45million / week of unsatisfied demand won't move the price when Bitcoin's halving occurs …
— Alistair Milne (@alistairmilne) December 3, 2019
If that is the case, chances are the market is repricing itself in expectation of a supply shock that could lift prices up as demand remain constant or increase.