Bitcoin Options Traders Anticipate Imminent Breakout Above $74K to New Record Prices

Bitcoin

(BTC)
options
traders
are
increasingly
positioning
for
the
asset
to
hit
fresh
record
prices
this
month,
market
data
suggests.

“Our
desk
saw
strong
bullish
follow-through
with
significant
call
buying
for
June
expiries,
indicating
positioning
in
the
options
market
for
a
decisive
break
of
74,000
all-time-highs
this
month,”
digital
asset
hedge
fund
QCP
said
in
a
Wednesday
market
update.

Options
are
derivative
contracts
that
give
buyers
the
right
to
buy
or
sell
an
asset
at
a
certain
price
before
or
at
a
predetermined
date
when
the
contract
expires.
If
the
underlying
asset
doesn’t
reach
the
strike
price
(out
of
money),
the
option
will
expire
worthless.
Purchasing
calls
implies
a
bullish
outlook
for
an
asset’s
price,
while
put
option
buyers
are
bearish.

“Options
flow
was
clearly
bullish
today
with
big
sizes
on
long
BTC
OTM
[out-of-money]
call
spreads
in
end
June,
and
to
a
lower
extent
end
July,”
institutional
crypto
derivatives
trading
network
Paradigm
said
in
a
Telegram
broadcast.

Joshua
Lim,
co-founder
of
crypto
derivatives
principal
trading
firm
Arbelos
Markets,
noted
“very
concentrated
call
buying”
on
Tuesday
with
about
1100
contracts
purchased
of
June
28
expiration
call
spreads
in
$74,000-$80,000
strikes,
representing
around
$80
million
notional
demand.

A
call
spread
is
an
options
trading
strategy
in
which
buys
of
call
options
at
a
lower
strike
price
and
are
made
alongside
sales
of
the
same
amount
of
calls
at
a
higher
strike
price
with
the
same
expiry,
aiming
to
profit
from
a
limited
price
increase.

Bitcoin
has
spent
almost
three
months
consolidating
since
notching
an
all-time
high
slightly
below
$74,000
in
mid-March.
After
plummeting
briefly
below
$57,000
in
early
May,
it
saw
a
steady
recovery,
now
changing
hands
at
around
$71,000,
only
a
few
percentage
points
from
new
record
prices.

Crypto
investment
services
firm
Matrixport
said
in
a

Wednesday
X
post
that
bitcoin
“appears
to
be
ready
to
squeeze
higher,”
supported
by
heavy
inflows
to
U.S.
spot
bitcoin
exchange-traded
funds
and
rising
open
interest
in
the
futures
market.

A
surge
above
the
$72,000
level
could
induce
a
short
squeeze,
Matrixport
noted,
as
there’s
some
$1.5
billion
worth
of
leveraged
futures
contracts
betting
on
lower
prices
concentrated
around
that
range
that
could
be
liquidated,
exacerbating
the
move
higher.