For an individual who wishes to make a profit on the high volatility of bitcoin which has been on the rise for several months, the temptation to sell is currently strong. While current prices close to the 2017 all-time high might prompt some people to sell now, investors would still be patient. This conclusion comes from an analysis of the current activity in the bitcoin options market on which bitcoin options continue to exert buying pressure. Conduct that suggests that investors expect a new ATH.
The ever increasing demand for purchasing options
While bitcoin’s volatility has reached 81% this year, it has mostly been influenced by a bullish call option demand to the detriment of that of sale. This is notably the analysis made by Vishal Shah which declares that ” the recent rise in implied volatility is the result of much of the buying of call options “. The man who is an options trader and founder of the Alpha5 derivatives exchange is in a good position to talk about this trend. He actually attended constant positioning of investors in the call options market in recent months.
The latter exerted such strong pressure on the market that put option costs are now near their record low. Ultimately, the fact that call options are more attractive to investors at this time is a signal that investors expect a continuation of the bitcoin bull cycle. Their conduct in the market did not change when the asset price dropped sharply from $ 18,400 to $ 17,100. The sequence of events will prove them right as bitcoin quickly caught up to the $ 19,000 mark with the 2017 record in their sights.
What will happen once the ATH is reached or even exceeded?
This is the $ 20,000 question any savvy market observer would ask after reading the previous information. The temptation to make a profit will be even stronger among investors as bitcoin will approach its record value. Co-founder and CEO of Blockchain.com, Peter Smith raised the possibility of a significant price movement in the market.
For now, this investor preference for call options appears to continue to propel bitcoin on its rise. Only the evolution of the asset price in December will tell us whether they were right to stick to their positions for so long.