Activity in Bitcoin Options Indicates Increased Wagering on Price Pullback Following Inability to Surpass $100,000 Threshold

Authored by Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The global bitcoin investor community is bracing for a potential downtrend as the pre-eminent cryptocurrency failed to breach the coveted $100,000 milestone, a sentiment echoed by recent options market trends reported by a cryptocurrency exchange platform.

Bitcoin (BTC-USD) achieved an unprecedented peak of $99,830 on November 22, but has retraced by over 8%, reaching a one-week nadir at $91,377.32 this past Tuesday.

Amidst a remarkable rally of 120% through the year, and roughly 34% over the present month, the cryptocurrency has been bolstered by Donald Trump’s ascendancy to U.S. president, who, alongside an assembly of crypto-friendly legislators, has vouched for cryptocurrency, aiming for the U.S. to emerge as the central hub for digital assets and amassing a governmental reserve of bitcoin.

Nick Forster, founder of the onchain options decentralized database Derive, with an overall transaction volume of $7.1 billion, conveyed via email on Tuesday his analysis that the current call-put skew index leading up to the December 27th bitcoin expiration reflected a considerable 30% fall over the preceding day, signifying a market shift towards more conservative positions.

The call-put skew is a gauge of market mood, showing the variance in implied volatility between purchasing options (calls) and selling rights (puts), which though still suggests a call over put preference, reveals a notable decrease.

“This indicates that traders are safeguarding against potential downside dangers,” commented Forster, considering the recent sharp drop in BTC value. “Nonetheless, such retracements are not unusual in ongoing bull markets.”

Observers now closely watch the December 27th date, given that bitcoin options worth $11.8 billion are set to expire, potentially leading to significant market movements in either direction.

Presently, Forster postulates a 68% likelihood of bitcoin moving either down by 16.03% to $81,493 or up by 19.9% to $115,579 by December 27. Yet, there is a lesser 5% chance of bitcoin undergoing more drastic fluctuations—plummeting 29.49% to $68,429 or rocketing 41.83% to $137,645 on the same timeline.

Analysis from Derive also demonstrates a 45% chance of bitcoin reaching $100,000, up from the previous week’s odds of 34%, alongside a newfound 4% possibility of surpassing the $150,000 mark.

Additionally, Forster remarked on the stability observed in bitcoin’s volatility over the last seven days, with a seven-day at-the-money implied volatility level sitting at 63% and a 30-day rate at 55%.

“Such closely aligned figures hint that the market is predicting significant imminent shifts.”

Currently, bitcoin has retreated from its apex, with profit-taking cited by market analysts as one key factor in this correction.

In his latest address to clients on Tuesday, Anthony Pompliano, CEO and founder of Professional Capital Management, referenced analyses from _checkonchain.com, indicating that long-standing holders divested $60 billion worth of bitcoin in the preceding 30-day period.

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