Bitcoin (BTC) Options Market Isn\'t Buying BTC Price Weakness, Shows Bias for $100K Calls

Demand for BTC calls at $100K suggests traders preparing for a renewed rally into 2025, according to one trading firm.

Crypto options traders are placing bets that differ from the ongoing downtrend in bitcoin's (BTC) price.

Over the past 24 hours, the world's largest cryptocurrency by market value declined over 1% to $64,500, widening the pullback from recent highs around $72,000, CoinDesk data show.

However, the flow in bitcoin options listed on leading exchange Deribit has been skewed toward call options at levels (strikes) that are significantly higher than the cryptocurrency's prevailing market price, possibly indicating that some sophisticated investors expect the ongoing price weakness to set the stage for a broader rally.

"In the options market, we observed an abnormally large buying flow of Dec and Mar [expiry] $90-$100K calls in the last 24 hours. We believe this suggests the market is calling the bottom and positioning itself for a sustained rally, possibly last into 2025," Singapore-based QCP Capital wrote in a market update.

A call option gives the purchaser the right but not the obligation to buy the underlying asset, BTC, at a later date. A call buyer is implicitly bullish on the market.

The chart below shows the most active bitcoin options on Deribit over the past 24 hours. The activity was largely concentrated in June expiry calls at $65,000, $68,000 and $70,000, July expiry call at $110,000 and December expiry call at $95,000.

The divergence in sentiment between the options market and bitcoin's price is more strongly evident in the call-put skew, which indicates what traders are willing to pay to acquire an asymmetric payout in the upward or downward direction.

According to Amberdata, the one-, two-, three- and six-month skews have remained positive throughout the recent pullback in BTC price, indicating a bias for calls or upside. Only the seven-day skew turned negative, signaling demand for downside protection.

Bitcoin has largely decoupled from the Nasdaq's rally in recent weeks, owing to coin sales by long-term holders and miners and growing chatter about the non-directional nature of the ETF inflows. On Thursday, the German government moved BTC worth $425 million to another cryptocurrency, likely with the intention of selling.

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