Bitcoin I just gave the options desks the breakout they were positioning for.
The largest crypto topped $81,000 during Asian hours on Tuesday, its highest level since late January, up from $79,000 at the end of U.S. trading hours on Monday and 5.3% higher for the week.
Other majors traded mixed. Ether held $2,379, down 0.1% on the day but up 4.0% on the week. XRP slipped 0.9% to $1.40. Solana fell 0.9% to $84.84. BNB was at $626. Dogecoin fell 1.0% to $0.1117 after last week’s run, although it remains the strong point on the seven-day band at 12.4% as futures open interest continues to hover at year-long highs.
The move came as Brent crude collapsed to $113 a barrel after jumping 5.8% on Monday following Iran’s disputed missile claim, with WTI approaching $104.
The macroeconomic situation has not really improved, although developments in the current relationship between the United States and Iran appear to be losing their grip on bitcoin.
The U.S. destroyers Truxtun and Mason passed through the Strait of Hormuz overnight, escorting two U.S.-flagged ships in what U.S. Central Command described as “coordinated threats.” A VTTI oil terminal in Fujairah was hit in an air attack. President Donald Trump told Salem News Channel that the war could last another two to three weeks, meaning the previously announced four-week ceasefire is unraveling.
Options markets are showing a flurry of action with bets on higher prices in the coming days, Laser Digital, the market-making arm of Nomura, reported in a note shared with CoinDesk on Tuesday.
Bitcoin volatility has been quiet for most of the past week. Traders weren’t buying much option protection and the price wasn’t moving fast enough to justify it. When desks paid for protection, they paid more for puts (bets on the price falling) than for calls (bets on the rise) – the standard playbook in a market that worries more about a decline than a rally.
But beneath that, there has been a quiet demand for cheap bullish bets, structured by what traders call call ratio strategies. The trade involves buying call options that prove profitable if bitcoin recovers a little, and financing them by selling other call options that only prove profitable if bitcoin recovers a lot. The setup costs almost nothing initially and is beneficial if Bitcoin rises without breaking above the higher level.
“Should the spot price make a decisive breakout above $80,000, the currently negative BTC risk reversal is expected to move into positive territory,” the note said.
A risk reversal is the difference in implied volatility between equally out-of-the-money call and put options. When it remains negative, the market incorporates more fear of a decline than greed for a recovery.
A turn toward the positive would be the first sign that options markets have indeed moved from cautious to constructive.
All major central banks held their rates last week, which Laser Digital says narrows the rate distribution to the right and keeps U.S. financial conditions in their current range. Strategy reports earnings on Tuesday and U.S. nonfarm payrolls fall on Friday. Both can move bitcoins if the surprise is big enough.
