As a seasoned researcher with years of experience tracking the volatile world of cryptocurrencies, I can’t help but feel a sense of deja vu when observing the current state of Bitcoin options block trading and the broader market. The recent surge in activity, particularly the notable uptick in bearish bets despite the brief price rally, is reminiscent of the patterns we saw leading up to significant corrections in 2018, 2019, and even earlier this year.
Over a prolonged period of inactivity, there’s been a remarkable revival in the Bitcoin options block trading, recording over half a billion dollars in worth. This increased trading indicates that traders are becoming increasingly pessimistic, despite Bitcoin’s price making an effort to reverse and climb above $61,000 at the time of reporting.
Bitcoin Options Block Trading Outlook
According to data from Greeks.Live, it appears that approximately 3,643 Bitcoin options calls (which is 24% of the day’s total trading volume) and 2,084 Bitcoin options puts (accounting for 14%) were traded. In other words, a significant portion of the day’s trading activity involved these two types of options.
The latest figures indicate that Bitcoin’s short-term volatility has dipped below 50%, suggesting large investors and significant Bitcoin holders are adopting a more conservative stance regarding this month’s market movement. Over the past four weeks, Bitcoin enthusiasts have repeatedly failed to push prices above $60,000. As the price of Bitcoin currently stands at about 4.32% over $61,000, it will be intriguing to observe if the bulls can continue their upward momentum from this point. Everyone’s attention is focused on Jerome Powell’s speech following the FOMC meeting on August 21st.
Furthermore, Greeks.Live noted that Ethereum options have been quite active as well, with 31,430 ETH block call options accounting for 20% of daily trades and 28,488 ETH block put options accounting for 18%. This suggests that the majority of crypto traders are presently more interested in selling call options and buying put options.
Today has seen a resurgence in block trading activity, with massive increases in block trades reaching over half a billion dollars. One notable example is the trading of 3,643 BTC call options within blocks, which made up about a quarter of today’s total trading volume. Additionally, there were 2,084 BTC put options traded as part of these large blocks.
— Greeks.live (@GreeksLive) August 20, 2024
On-chain Data Shows Bearish Bitcoin Trend
As an analyst, I’ve been closely monitoring the on-chain dynamics of Bitcoin, and it appears that we’re seeing some robust bearish indicators. Over 80% of short-term Bitcoin holders are currently grappling with losses, having acquired their BTC at a price above the current market value.
In this case, we’re experiencing a scenario strikingly reminiscent of the one that unfolded in 2018, 2019, and around mid-2021. This suggests an intense panic among numerous investors, which could possibly lead to a downward trend in the market.
As a crypto investor, I find myself in agreement with Bloomberg commodity strategist Mike McGlone’s recent statement. He suggests that Bitcoin could spearhead the reversal of risk assets, having led many to this year’s highs and potentially doing so again as we head down. On the flip side, companies like Metaplanet remain committed to their long-term Bitcoin investments, continuing to acquire more despite market fluctuations.
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2024-08-20 10:18