The options market traders have become increasingly bullish following Bitcoin’s impressive rally above $40,000. These traders are optimistic, with their expectations hinging on the potential approval of a spot Bitcoin ETF, which is anticipated in the initial ten days of 2024.
A new report suggests that these entities are opting for January options.
Following the delivery last week, the December options share for BTC exceeded 50%. However, with the market progressing this week, the share of December options retreated back below the 50% mark.
According to the data provider Greeks.Live, this can be attributed to the notable rise in short-term options positions driven by the short-term market dynamics. Simultaneously, traders with a bullish outlook on the ETF are going for January options trading.
This not only suggested that the market is “very hot right now” but particularly resembled to the atmosphere of the end of 2020.
Bitcoin experienced a surge surpassing $44,000 on certain crypto exchanges, such as Coinbase. This marks the first time it has reached this level since early April 2022.
The leading asset continued its upward momentum, buoyed by decreasing interest rates and the expectation of a spot Bitcoin exchange-traded fund (ETF) in the United States. While Bitcoin later retraced to the $43,400 level, it is interesting to see if the bulls will resume control over the market.
According to the Greeks.Live’s earlier observation, the current bull market is predominantly influenced by spot trading, as key derivatives indicators remain relatively stable.
Futures premiums were found to be maintaining approximately a 10% level, and there are no substantial increases in implied volatilities (IV) for options. The platform reveals that it is essential to contextualize this rally and the news about the imminent approval of the ETF. In doing so, it was found that the spot-driven bull market suggests a limited downside.
“We have to put this rally and the news of the impending passage of the ETF in perspective; this spot bull market is very healthy, the downside is limited, and the bull market is here to stay.”
