- Bitcoin options traders are as bearish as they were during the May 2021 crash.
- The implied volatility also suggests that options investors have no idea where BTC could be headed next.
- Bitcoin options are now cheaper than it has been in a very long time.
Bitcoin options data suggest that traders are currently bearish and hesitant in betting on the leading cryptocurrency’s next directional moves. Investors have not been this long-term bearish since the May 2021 crash when over 50% of BTC value was wiped out.
Bitcoin options traders are hesitant
Cryptocurrency market analysis firm Arcane Research recently released a new report, noting that the low implied volatility at roughly 70% indicates that options traders have not been more long-term bearish since May 2021.
Since Bitcoin options allow traders to bet on movements in BTC price, the more volatile the asset is, the more expensive its options are. Therefore, the low implied volatility rate indicates that traders may be hesitant to bet on where the bellwether cryptocurrency could go next, and options are cheaper than it has been in a long time.
Arcane Research further noted that Bitcoin’s volatility skew has been the highest since May 2021. Volatility skew measures the relative difference between prices of put and call options.
Historically, call options have been more expensive than put options, generating a negative volatility skew.
However, following the recent decline in Bitcoin price, the BTC volatility skew is now the highest since the May 2021 crash, suggesting that there is more demand for puts than calls, a bearish sign.
Bitcoin options traders are now more bearish than they have been in a long time, and they also seem hesitant on picking a direction that they think BTC is headed in.
The report suggests that this may be an opportunity “to buy some cheap calls.”
Bitcoin price forms bullish chart pattern
Despite the lack of confidence shown by Bitcoin options traders, BTC has formed an ascending triangle pattern on the 4-hour chart, projecting a 15% climb from its upper boundary toward $44,884.
In order for the leading cryptocurrency to reach the bullish target, Bitcoin must slice above the upper boundary of the prevailing chart pattern at $38,982. Additional obstacles may emerge at the 200 four-hour Simple Moving Average (SMA) at $41,225, then at the 50% retracement level at $43,016.
BTC/USDT 4-hour chart
If a spike in sell orders occurs, Bitcoin price will discover immediate support at $38,232, where the 21 four-hour SMA, 50 four-hour SMA and 23.6% Fibonacci retracement level intersect.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery
![Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Coins/Ripple/Ripple_Coin_31_02_XtraSmall.jpg)
Ripple made a comeback above $0.48 on Tuesday and hovers above that level in Wednesday’s European session. Ripple on-chain metrics such as transaction volume and Network Realized Profit/Loss have turned bullish, supporting a recovery in the altcoin.
Bitcoin price falls amidst German government transfers, miners activity
![Bitcoin price falls amidst German government transfers, miners activity](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bit-coin-symbol-flag-3d-illustration-59931110_XtraSmall.jpg)
Bitcoin (BTC) extends correction on Wednesday and hovers around $61,000 after finding resistance near the $64,000 level on Monday. Recent on-chain data indicates heightened selling activity from Bitcoin miners early in the week.
Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds
![Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/Bitcoin_2_XtraSmall.jpg)
Bitcoin wipes out gains from the last week of June and falls below $60,000 on Wednesday. Ethereum and top altcoins ranked by market capitalization erased gains as the inflation outlook worsened. Ripple holds on to recent gains and hovers above $0.48 on Wednesday.
Three reasons why altcoins could shake off losses this week
![Three reasons why altcoins could shake off losses this week](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/cryptos_XtraSmall.jpg)
On-chain data from Santiment shows that altcoins are currently in the opportunity zone, or generating buy signals. The top three altcoins in the buy zone are Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH), per Santiment.
Bitcoin: BTC price correction could end in July, according to seasonal data
![Bitcoin: BTC price correction could end in July, according to seasonal data](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoin_5_XtraSmall.jpg)
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.