The recent resurgence in Bitcoin’s price has sparked renewed optimism among options traders, with many now anticipating the possibility of the cryptocurrency reaching the $100,000 mark later this year.
The leading cryptocurrency has risen over 12% to $63,470 since Federal Reserve Chairman Jerome Powell ruled out additional tightening or rate hikes last Wednesday, and the disappointing U.S. nonfarm payrolls data on Friday further validated Powell’s stance, accelerating Bitcoin’s recovery.
TLDR
Bitcoin’s price surge has led to increased demand for out-of-the-money call options, with traders anticipating a potential rally to $100,000 this year.
The options market has seen a rise in bullish sentiment, with the number of active call contracts significantly higher than put contracts.
Analysts believe the path of least resistance for bitcoin is on the higher side, citing factors such as the U.S. election cycle, ongoing deficit spending, and a weakening dollar index.
Grayscale’s Bitcoin Spot ETF received $63 million in inflows last Friday, ending a four-month streak of continuous outflows.
Bitcoin’s volatility has declined following the completion of the halving event last month, leading to increased stability in the crypto market.
As a result, there has been a notable increase in demand for bitcoin call options on leading cryptocurrency exchange Deribit and over-the-counter (OTC) networks.
These options are specifically targeting a rally to new highs, potentially surpassing $75,000 and even reaching $100,000. QCP Capital, a cryptocurrency trading firm, noted that bitcoin risk reversals have gone positive, indicating that calls are more expensive than puts, and there has been renewed demand for $75,000 and $100,000 call options expiring in September.
The bullish sentiment in the options market is further evidenced by the fact that more than 150,000 call option contracts worth $9.5 billion were active on Deribit, more than double the open interest in put options.
The highest notional open interest among all options listed on the exchange is in the $100,000 strike call options, with traders locking in over $688 million across different maturities.
Fundamental and technical analysts are also in agreement that the path of least resistance for bitcoin is on the higher side.
10X Research cites the ongoing U.S. election cycle and deficit spending as factors supporting bitcoin, while Swissblock Insights expects the dollar index (DXY) to remain defensive unless Powell’s stance is challenged, which could be positive for risk assets like cryptocurrencies.
Other Positive Factors
In addition to the bullish options market sentiment, other factors have contributed to the current Bitcoin price surge. Grayscale’s Bitcoin Spot ETF received $63 million in inflows last Friday, ending a four-month streak of continuous outflows that began after the organization turned to a Spot ETF in January.
This influx of funds, along with increased earnings reported by companies like Coinbase, Block, and MicroStrategy, has contributed to improved market conditions.
Another factor supporting the current price surge is the decline in Bitcoin’s volatility following the completion of the halving event last month.
The Bitfinex Alpha report notes that Bitcoin’s implied volatility (BVIV) has dropped more than 18%, from 74.5% to 56.4%, indicating the market’s adjustment to the new supply. Similarly, Ethereum’s implied volatility (EvIV) has declined from 61.9% to 52%, despite the price surge.
As Bitcoin continues to trade above key support levels, such as $63,000 and the 100 hourly Simple Moving Average, traders are watching for further upside potential.
Immediate resistance lies near the $64,500 level, with the first major resistance at $65,000 and the next key resistance at $65,500. A clear move above the $65,500 resistance might send the price higher, potentially targeting $67,200 and even $68,800.
However, if Bitcoin fails to rise above the $65,500 resistance zone, it could start another decline. Immediate support on the downside is near the $63,350 level and the bullish trend line, with the first major support at $62,800.
A close below $62,800 could lead to a drop toward the $60,800 level, which represents the 50% Fib retracement level of the upward move from the $56,380 swing low to the $65,550 high.
While the path to $100,000 may not be without obstacles, the current market conditions and the increasing institutional interest in Bitcoin suggest that the cryptocurrency may be poised for further growth in the coming months.
The post Bullish BTC Factors: Bitcoin Bulls Charge Ahead, Is $100,000 the Next Stop? appeared first on Blockonomi.
