Options Indicate A Stronger Bitcoin Chart into July

For the first time in a long time, Bitcoin’s price expectations into July this year have flipped to the positive side. This comes after crypto experts like David Ahier continue to predict a bull run in the market.

Since the start of 2021, Bitcoin has had its 6-month call-put skew cross the zero thresholds. Analysing the data obtained by Amberdata, this move indicates a potential bullish run that expires in a round of six months, i.e., into July.

The skew, an ideal consensus measurement tool for the next 180 days, measures price calls relative to puts. Both investors and large institutions usually use the skew to speculate future prices of cryptocurrencies. According to one of the biggest crypto exchange firms, Deribit, the skew measurement translates to the sentiments and flows in the market. In other words, it’s a true reflection of what people are willing to pay for Bitcoin, thus indicating the direction in which the market is heading.

Options can be defined as derivative contracts that allow buyers to sell or buy a particular asset at a particular price before or on a particular date. It’s important to note that these contracts don’t force buyers to buy or sell the asset at any given time. There are two types of options, a call option which allows a buyer to sell, and a put option which gives the purchaser the right to sell. According to Amberdata, call and put skews have returned positive results for the first time since 2021. In this case, both long-term and short-term options.

The indication of a bullish run kicked off early last week after the coin broke its 200-day moving average for the first time since April 2021. At the end of last week, Bitcoin had realized more than a 20% gain. The highest ever Bitcoin gain recorded since February 2021.

In a newsletter published on Sunday, Gregoire Magadini of Amberdata wrote that the main trade on the spot market was at $17k, and calls were bought at around $18 and $19k in the options market. Magadini noted the positives in the market, saying that the trades in the options market indicated a break of previous resistance levels.

Evidence of the current bull run can also be seen in the renewed premium in BTC futures recently listed on CME (Chicago Mercantile Exchange). The front-month contract, which expires at the end of this month, set a new high of $21,535 in four months. The spot market was trading at $21,437, a price last seen toward the end of October last year.

The current positive turnaround can be attributed to the massive improvement in the macroeconomic backdrop and the recent risk revival in the traditional markets. In addition, it is common for cryptocurrencies to rise as their mining reward halving date approaches. A mining reward halving is a program that cuts down the supply pace expansion of crypto by half. And it happens every four years. With that in mind, it is important to note that Bitcoin will have its fourth halving around March 2024.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.