Bitcoin Options Open Interest Nears All Time High – But Rise in Puts Could Presage Drop
While open positions in bitcoin (BTC) options have risen to near record-high levels, itâs not necessarily a good thing for those hoping for the rally in the cryptocurrency to continue.
- The total number of outstanding BTC options contracts â or open interest (OI) â increased to $2.10 billion Thursday â just shy of the all-time high of $2.11 billion in late July, per data from Skew.Â
- On its own, high open interest can indicate existing trends are likely to be sustained â suggesting BTCâs recent rally from $10,650 could continue.
- But the number of bearish puts relative to bullish calls has recovered from -10.3% to -3% in the past four days. As the graph below shows â traders are offloading much of their call options onto the market.
- This suggests bullish speculation is beginning to ease â a sign of investors anticipating consolidation or price drop
- Indeed, BTC has already pulled back more than 5% from the 13-month high above $12,400 it reached on Monday.Â
- Unless buying action comes quick, downwards momentum could push prices down to $11,000, QCP noted earlier this week.
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