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Numerous traders anticipate that bitcoin will rebound toward the $80K mark between June and September, according to Derive.
Key points:
- Current options pricing indicates approximately a 35 percent likelihood that bitcoin will exceed $80,000 by the end of June, reflecting a notable shift towards bullish sentiment.
- Options skew metrics have bounced back from significantly negative levels in February to around plus 10 percent, suggesting that traders are reducing crash hedges and anticipating more stable or increasing prices.
- A rise in put writing across various platforms indicates traders are becoming more willing to accept downside risk for premiums as bitcoin trades close to $70,000, which is up roughly 5 percent for the month.
Market sentiment for has turned optimistic, with traders positioning themselves for a rally beyond $80,000.
This is the perspective from a decentralized exchange that facilitates on-chain trading in cryptocurrency futures and options.
"Present options pricing demonstrates an approximate 35% chance that BTC will surpass $80K by the end of June," stated Nick Forster, founder of the on-chain options platform, Derive.xyz, in an email to CoinDesk. "Coupled with the recovery in skew, this activity implies that many traders foresee bitcoin rising toward the $80K level between June and September."
Options are derivative instruments that allow you to wager on BTC price movements, but with a built-in safety mechanism that limits your loss to a small upfront cost, rather than your entire account, if the bet does not succeed. It is comparable to purchasing a lottery ticket.
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A call option allows you to speculate on price increases, whereas a put option enables speculation on price declines. The latter is viewed as a protective hedge.
Traders typically monitor options skew – the notable pricing difference between calls and puts – to gauge market direction. When calls are more expensive than puts, it indicates a bullish tilt, while a higher put premium suggests the opposite.
Recovery of BTC’s skew
Bitcoin’s seven-day and 30-day skews have recovered to -6% from the -25% panic lows observed in early February, when BTC dropped toward $25,000.
This change indicates that traders are reducing reliance on protective puts – less crash hedging and more calmness in the market.
"In spite of previous anxieties regarding a potential catastrophic decline in the cryptocurrency markets, derivatives markets imply that those concerns may have been exaggerated. BTC skew – an essential indicator of sentiment in options markets – has rebounded sharply from around -25% (normalized by at-the-money implied volatility) to approximately +10% today, indicating a substantial shift away from aggressive downside hedging," Forster noted.
Skew metrics from the leading centralized options exchange Deribit reflect a comparable trend.
As per Forster, put writing has surged across multiple platforms recently, signifying that traders are willing to accept downside risk in exchange for premiums, aligning with expectations of stabilizing or rising prices.
At the time of reporting, bitcoin was trading near $70,000, an increase of nearly 5% for the month, according to CoinDesk data.
