Bitcoin is riding a wave of positivity as its one-month call-put skew skyrockets, signaling a level of optimism not seen in the crypto world for over two years. With the metric crossing the 10% mark, it points to a significant shift in market sentiment, strongly leaning towards the possibility of prices going up.
Optimism and Expectations Are High
Options traders have historically used the 25-delta one-month call-put skew to see the market’s future expectations. A value surpassing 10% illustrates an intense competition among traders to secure calls — the option to buy Bitcoin at a future date for a fixed price — over puts, which offer the right to sell. This fervor is not without foundation, as it aligns with the burgeoning hope surrounding Bitcoin spot exchange-traded Funds (ETFs).
Also Read: Spot ETF Approval Could Soar BTC Price to $220k, Predicts John Deaton
Bitcoin’s Rise: Thanks to ETFs?
Bitcoin’s recent climb past $36,800 is all about the hopeful buzz around spot ETFs. These are like a golden ticket for crypto fans, offering direct exposure to Bitcoin and potentially changing how regular folks invest in digital money. Even the idea of approving a spot ETF has investors excited, seeing Bitcoin as a legit and profitable investment.
As Bitcoin goes higher, the popular move of selling calls to make money on Bitcoin holdings seems to be losing its charm. Now, people are more into directly buying call options, showing they believe in Bitcoin’s lasting value. The confidence in its rise is strong.
Market Makers in Action
The demand for calls has left market makers—the folks who make trading options happen—with a challenge. They’re holding a lot of short positions, especially for options above $36,000. As Bitcoin stays above this level, market makers have to get Bitcoin to balance things out, unintentionally adding fuel to the speeding-up rally.
Predictions for Bitcoin’s performance go beyond the next month. The outlook for two, three, and six months is also looking positive, suggesting that people don’t just believe in Bitcoin for a little while but are convinced it has a solid future. Get ready for a steady rise, showing a widespread belief in Bitcoin’s lasting potential.
Read More: Grayscale and SEC in Talks: GBTC Set to Become a Bitcoin ETF!
Are you betting on Bitcoin’s continued rise? Why or why not? Let us know.
Source: https://coinpedia.org/news/bitcoins-bullish-surge-fueled-by-etf-optimism-and-call-skew-records/