Bitcoin Options Give Mixed Signals, Institutional Investors Start Shorting ETF Market

The approval of the first spot Bitcoin ETF in the US seems to be almost imminent with the Bitcoin price rallying all the way to $47,000 on Monday, January 8. However, the Bitcoin rally cools down as the BTC price seems to be consolidating around the $46,500 level.

Bitcoin Options Market Give Mixed Signals

Recent developments are fueling expectations of an imminent ETF, leading to heightened FOMO sentiment, particularly during US trading hours, as Bitcoin surged to a new high of $47,000, according to insights from Greeks.Live.

However, the options market presents mixed signals. Short-term IVs (Implied Volatilities) witnessed a sharp decline, with the current ATM (At-The-Money) option IV for the 11th of June dropping below 90%, marking a 30% decrease within a few hours. Other terms also experienced significant declines.

Furthermore, despite the breakout to new highs, block trades have shown relative restraint, primarily dominated by selling calls and buying puts. This trend raises questions about the cautious stance of institutional investors, who initiated short positions in the ETF market when it was at its peak momentum.

These nuanced signals in the options market and the strategic moves by institutional players add an element of uncertainty about the future trajectory of the ETF market, prompting market participants to closely monitor developments for potential shifts in sentiment and market dynamics.

BTC Whales Are Selling?

Many analysts anticipated that the Bitcoin ETF approval would be a sell-the-news event leading to the BTC price dropping under $40,000. Also, the whale action shows concerning signals as of now.

In a notable development, Lookonchain highlights a strategic move by a smart whale in the cryptocurrency market. Following Bitcoin’s surge above $45,000 today, the whale deposited a substantial 1,000 BTC, equivalent to $22.47 million, into Binance. This move aligns with a broader trend observed over the past two weeks, where the same whale deposited a total of 4,000 BTC, amounting to $178.7 million, to Binance.

Notably, the strategic deposits were made at an average price of $44,673 during the specified two-week period. What makes these transactions stand out is that the whale strategically sold at high prices on each occasion, indicating a calculated and opportunistic approach to capitalizing on favorable market conditions.

A smart whale deposited all 1,000 $BTC($22.47M) to #Binance after $BTC rose above $45K today.

The whale deposited 4,000 $BTC($178.7M) to #Binance at an average price of $44,673 over the past 2 weeks, selling at a high price each time.

Through on-chain tracking, the whale's… pic.twitter.com/eSZ6B32BjU

— Lookonchain (@lookonchain) January 8, 2024