Traders Bet Big with Options at $65K and Beyond

• Bitcoin traders are bullish on the crypto, with call options at strike prices of $60,000 and above dominating the market ahead of the end-month expiry on Feb. 23.
• The surge in call options demand at high prices is reminiscent of the 2020-21 bull market, where traders accumulated call options of up to $80,000 as BTC shot its way to its all-time high of $69,000.

The bulls are taking over the reins in the Bitcoin market, with the derivatives market recording optimism last experienced in the historic 2021 bull market. Data from top derivatives exchanges show that traders are accumulating call options at prices above $60,000, indicating confidence that the top crypto will retest its all-time high of $69,000.

Since the start of the weekend, traders have been snapping up call options on some of the largest derivatives exchanges. On Deribit, one of the leading players in the sector, the Bitcoin call options with strike prices above $65,000 dominated the trades, the exchange revealed.

The situation was similar at Bitfinex, another major player. Jag Kooner, the head of derivatives at Bitfinex, revealed that traders are betting on call options with strike prices up to $75,000, an uber-bullish outlook given Bitcoin has never hit such highs.

Kooner stated:

The strike price with the second highest open interest is $60,000, and the current day’s second highest options contract in terms of volume traded is bitcoin call options with a strike price of $75,000 for the June 24 expiry.

Bitcoin Traders Amass Call Options—Is a Surge Past $65,000 Imminent?

In the derivatives market, call options are financial contracts that afford a trader the right to purchase an asset at a predetermined price at a future date. While the buyer of an option isn’t obliged to make the purchase, the seller must sell the asset if the buyer decides to exercise the option.

Buyers of call options are considered bullish, and an increase in the same usually precedes a price rally. Significantly, most investors in the derivatives markets are professionals with millions to spend.

Galaxy Digital’s Kelly Greer noted that similar activity was observed in the last quarter of last year, where investors snapped up on-the-money call options at $30,000-$40,000 (BTC started the quarter at $27,000). Their confidence in the top crypto was rewarded when BTC ended the quarter trading over $43,000.

Greer stated, “We see a concentration of open interest in $50k calls and have seen flows in $50K, $60K and $75K calls in the listed options markets from April to June maturities.”

She added:

These flows demonstrate conviction from buyers willing to pay a premium to take on these positions, suggesting investors have a constructive view on bitcoin.

The surge in investor confidence comes as Bitcoin has seen an uptick in price. Over the past week, BTC has gained 16% to trade above $49,000, its highest price for two years. BTC trades at $49,802 at press time as its market cap edges in on a trillion dollars.