The post Bitcoin’s Bullish Surge Fueled by ETF Optimism and Call Skew Records appeared first on Coinpedia Fintech News
Bitcoin’s one-month call-put skew has soared, demonstrating the most pronounced bullish outlook the cryptocurrency market has seen in over two years. This metric has exceeded the 10% mark, signifying a significant tilt in the balance of market bias towards a potential price rise.
Options traders have historically used the 25-delta one-month call-put skew to see the market’s future expectations. A value surpassing 10% illustrates an intense competition among traders to secure calls — the option to buy Bitcoin at a future date for a fixed price — over puts, which offer the right to sell. This fervor is not without foundation, as it aligns with the burgeoning hope surrounding Bitcoin spot exchange-traded Funds (ETFs).
How are Spot ETFs helping?
The resurgence of Bitcoin above the $36,800 threshold can be attributed mainly to the optimism surrounding spot ETFs. This financial instrument, long anticipated by crypto enthusiasts, offers direct exposure to Bitcoin and is seen as a game-changer for mainstream investment in digital currencies. The potential approval of a spot ETF has catalyzed investors showing a renewed interest in the cryptocurrency as a legitimate and profitable investment vehicle.
Due to the upward trajectory, the strategy of selling calls to earn a yield on Bitcoin holdings seems to be waning. This approach, once famous for its passive income potential, is being overshadowed by the direct buying of call options. Traders are increasingly inclined to leverage their bets on Bitcoin’s ascent, confident in its enduring value.
Market Makers and the Acceleration Effect
The rush for calls has left market makers — those facilitating the buying and selling of options — with significant short positions, particularly for options above the $36,000 benchmark. As Bitcoin floats above this level, market makers are propelled to purchase Bitcoin to balance their exposure, inadvertently contributing to the acceleration of Bitcoin’s rally.
The positive sentiment is not just a flash in the pan; projections for Bitcoin’s performance extend well beyond the one-month mark, with two, three, and six-month skews leaning similarly bullish. The confidence in Bitcoin’s value appears not just for the short term but is indicative of a broader conviction in the cryptocurrency’s robust future.
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