Bitcoin's recent price surge has prompted options traders to reconsider the possibility of the cryptocurrency reaching the $100,000 level by the end of this year. Since Federal Reserve Chairman Jerome Powell's announcement ruling out additional tightening or rate hikes, Bitcoin has surged over 12% to $63,470, with Friday's disappointing U.S. nonfarm payrolls data further fueling its recovery.
This upward momentum has led to a notable increase in demand for bitcoin call options on platforms like Deribit and over-the-counter networks. These call options are specifically targeting a rally to new highs, potentially surpassing $75,000 and even reaching $100,000.
According to market observations from QCP Capital and Paradigm, there has been a bullish follow-through in volatility and rates, with renewed demand for bitcoin call options with strikes at $75,000 and $100,000. Traders are particularly interested in out-of-the-money calls, which are options with strikes well above BTC's current market rate.
Data from Deribit indicates that traders have locked in over $688 million in call options with a $100,000 strike across various maturities, representing the highest notional open interest among all options listed on the exchange. Currently, there are more than 150,000 active call option contracts worth $9.5 billion on Deribit, indicating bullish market sentiment.
Overall, the surge in demand for bitcoin call options reflects growing optimism among traders regarding the cryptocurrency's potential for further upward movement, potentially reaching significant price milestones such as $75,000 and $100,000.
Analysts bullish on BTC
Both fundamental and technical analysts are currently aligned in their belief that the trajectory for bitcoin is skewed towards the upside.
According to 10X Research, bitcoin continues to find support from factors such as the U.S. election cycle and ongoing deficit spending. They have adjusted their key support level from 68,300 to 62,000, suggesting a bullish stance as long as the market remains above this threshold.
Swissblock Insights anticipates that the dollar index (DXY) will remain weak unless Federal Reserve Chairman Jerome Powell's stance is challenged. A weaker DXY typically benefits risk assets like cryptocurrencies. The DXY has declined by 1.2% since the Federal Reserve meeting, supporting this view.
Elliot wave analysis conducted by John Glover, the chief investment officer of Ledn, suggests that bitcoin could potentially rise to 92,000. According to Glover's analysis, bitcoin's price action aligns with the expected path for Wave 4, with a projected correction to around $52-55k before Wave 4 completes. Subsequently, a push towards $92k is anticipated as Wave 5 unfolds.
The Elliot wave theory, introduced by Ralph Nelson Elliott in 1938, proposes that asset price movements follow a repetitive wave pattern. Trends are characterized by five waves, with waves 1, 3, and 5 representing the primary trend and waves 2 and 4 indicating temporary retracements.
May 2024, Cryptoniteuae