Sentiment in Bitcoin the market has turned bullish and traders are betting on a rally above $80,000, with traders positioning for a rally above $80,000.
That’s the message from a decentralized exchange offering on-chain trading of crypto futures and options.
“Current options pricing shows a ~35% chance that BTC will reach over $80,000 by the end of June,” Nick Forster, founder of on-chain options platform Derive.xyz, told CoinDesk in an email. “Combined with the asymmetric recovery, this activity suggests that many traders expect Bitcoin to recover towards the $80,000 level between June and September.”
Options are derivative contracts that allow you to bet on whether BTC prices will rise or fall, but with a built-in safety net that ensures you only lose a small initial fee, not your entire account, if the bet fails. It’s like buying a lottery ticket.
A call allows you to bet on price increases, while a put allows you to bet on price decreases. The latter is therefore considered a protective hedge.
Traders typically follow options bias – that telltale price gap between calls and puts – to detect market trend. Calls higher than puts indicate a bullish tilt, while the put premium suggests the opposite.
BTC Tilt Recovers
Bitcoin’s seven-day and 30-day spreads are back to -6% from panic lows of -25% in early February, when BTC crashed towards $25,000.
This change signals that traders are giving up protective puts – less hedge against crashes, more stable nerves.
“Despite earlier fears of a catastrophic crash in crypto markets, derivatives markets suggest that these concerns may have been overblown. BTC skewness – a key measure of sentiment in options markets – has rebounded sharply from around -25% (normalized by on-the-money implied volatility) to around +10% today, signaling a significant move away from aggressive downside hedging,” Forster said.
Biases based on leading centralized options exchange Deribit paint a similar picture.
According to Forster, short sales (writes) of puts have increased across all markets in recent days, a sign that traders are willing to take downside risk in exchange for a premium, consistent with expectations that prices will stabilize or rise.
At press time, bitcoin was changing hands at nearly $70,000, up nearly 5% for the month, according to CoinDesk data.
