According to on-chain data on July 5, the total open interest for Bitcoin Options, which includes both call and put orders, initially increased to $14.87 billion on June 30 but subsequently decreased to $10.74 billion on July 4.
Additional information, Valkyrie has recently followed BlackRock’s footsteps by reapplying for a Spot Bitcoin ETF.
When the total Bitcoin Options open interest reached $14.87 billion, it was close to the previous all-time highs recorded in October 2021. During that period, Bitcoin prices surged, reaching an all-time high of over $69,000.
Specifically, on October 21, the total open interest for Bitcoin reached a record high of $15.06 billion, a milestone that has remained unbroken to date.
BTC Options Near 2021 Peak Levels
There is a prevailing sense of optimism among traders regarding Bitcoin’s future, as the open interest in BTC options continues to remain high, nearing the peak levels observed in October 2021. This trend suggests that many traders anticipate further price increases.
Bitcoin experienced a notable surge in prices during June 2023, reaching new highs at $31,300. This significant increase could be interpreted as a bullish signal, reminiscent of the period before Bitcoin reached its all-time high of over $69,000 in November 2021.
This skew and underlying optimism are evident in the distribution of Bitcoin options, both “call” and “put,” across major cryptocurrency derivatives trading platforms, with Deribit dominating the market. As of July 5, more than 65% of all Bitcoin options orders are categorized as “calls,” indicating that a majority of traders anticipate price increases from current spot rates. This level of market sentiment is reflected in approximately 206,000 BTC orders placed as “calls.”
Conversely, a minority of traders hold the expectation that price contracts will move towards $28,300 or lower in the upcoming months. Around 99,000 BTC options have been placed as “puts” to align with these traders’ outlook of potentially worse prices in the coming months.
Bullish Sentiment Among Bitcoin Traders
A similar trend can be observed in the trading patterns observed within the last 24 hours. Despite a 2% decline in Bitcoin prices, which managed to stay above the psychologically significant $30,000 level, the majority of options traders maintain a bullish outlook, as there are more “calls” than “puts” being traded.
Typically, options provide the contract holder with the right or obligation to buy or sell the underlying asset at an agreed-upon price on or before the expiration date. Traders often utilize options contracts to mitigate risks. The higher prevalence of “calls” suggests that a larger number of BTC traders are optimistic, anticipating the coin to surpass recent resistance levels.
Recent data indicates a decrease in options trading volumes on Deribit. Following its peak at $3.29 billion on October 16, 2021, participation levels have gradually declined over the past 20 months.
Throughout 2022, trading activity was suppressed during the bear market, which saw Bitcoin drop below $16,000 in November of that year. However, since then, options trading volumes have experienced a resurgence, reaching a peak of over $2.3 billion in March 2023. As of July 5, volumes have fallen below the $1 billion mark.
