Bitcoin Won’t Stay Below $30,000 for Long, Crypto Options Traders Are Betting on It
Rachel Lin stated that the lack of traders selling $30,000 Bitcoin call options suggests that market participants do not expect prices to stay below this level.
According to open interest in calls, there is “strong resistance” at $31,000.
Rachel Lin, CEO of decentralized derivatives exchange SynFutures, said in a note on Friday that Bitcoin’s (BTC) decline below $30,000 is most likely a temporary correction in an otherwise bullish market.
“Although bitcoin dips below $30,000, it is evident that there are no calls above $30,000 in the short-term. [option] Bitcoin, the largest cryptocurrency by market cap, traded above $30,000. Earlier in the month, it reached a price of almost $31,800. Positive catalysts included BlackRock’s filing for a spot bitcoin ETF and a partially favorable court ruling on Ripple’s Ripple Worryingly, the strong uptrend of the past six months makes it reasonable to view this as a temporary correction. The $31,000 call option, she added, “continues to attract” “high open interest” from traders. Lin indicated that this price level is a “strong impediment” to a possible upside of BTC.
Options are trading instruments that allow investors to buy or sell an asset at a specific price at a later date. Call option buyers can buy and put option buyers can sell. Call options are often used by bitcoin traders to capitalize on their bullish bets and make them cheaper.
Matrixport, a Singapore-based crypto services provider, advised investors to buy call options and instead sell spot BTC to maximize returns at a time when volatility is suppressed in crypto markets.
The Bitcoin Price Index is currently trading at $29,350, down 1.5% over the past week.
