Analysis of Bitcoin Options Trading Trends
Bitcoin has been experiencing notable fluctuations in its price recently, with options traders anticipating a continued downward trend following a recent correction. Reports from ETC Group analysts, referencing Deribit data, highlight a surge in selling positions taken by option investors.
This surge is interpreted as a strategy employed by option traders to safeguard themselves against potential further declines in Bitcoin after the recent correction. Observations reveal that the buy-sell ratio for Bitcoin option open positions surpassed 1 just before the weekly expiration on July 12, signaling a bearish sentiment in the market.
Analysts emphasize that the surge in put-call ratio for Bitcoin options open interest above 1 before the weekly expiration is considered a bearish signal. A ratio exceeding 1 signifies a higher volume of put options being traded compared to call options, indicating investors' inclination towards seeking protection from potential price declines and hedging against such downturns. This trend is further supported by data from Deribit, indicating that the largest option open positions expiring on Friday were at $58,000, with substantial concentrations of put options at maturity prices of $52,000 and $48,000.
The focus of option investors on put options underscores their anticipation of further downward movement in Bitcoin's price and the overall market sentiment. As of the latest update, Bitcoin is trading at $57,189.
Please note that this analysis does not constitute investment advice.
