Fun

Despite 23% gains, Bitcoin options traders still not bullish

News Feed - 2024-03-01 04:03:00

Marcel Pechman4 hours agoDespite 23% gains, Bitcoin options traders still not bullishDemand for Bitcoin options has been balanced between bulls and bears, meaning whales remain unconviced.3241 Total views104 Total sharesListen to article 0:00Market AnalysisOwn this piece of crypto historyCollect this article as NFTJoin us on social networksBitcoin (BTC) experienced a 23% gain in the five days ending Feb. 28, but BTC options traders are reluctant to adopt a bullish stance. This is partly due to the fact that the last time Bitcoin incurred a 5% weekly loss was more than five weeks ago, leading to a demand for downside protection.Traders fear reduced spot Bitcoin ETF inflows and a recession in the U.S.


Concerns arise among investors about the potential decline in the heavy inflow into spot Bitcoin exchange-traded funds (ETF), which could trigger a price correction. This suggests that these traders are either unconvinced by the current bull run or perceive no need for leverage in the face of macroeconomic uncertainty.


On Feb. 28 alone, U.S. Bitcoin ETFs saw a net inflow of $673 million, accumulating a total of $7.4 billion in net deposits since their launch on Jan. 11. Bloomberg"s senior ETF analyst, James Seyffart, reported this information, highlighting that only 150 ETFs have ever surpassed the $10 billion mark in assets under management. Notably, BlackRock"s iShares Bitcoin ETF already boasts over $9 billion in assets, according to Nate Geraci, co-founder of the ETF Institute.


Interpreting this data yields two distinct perspectives. Some argue that such inflows may not be sustainable in the long run, either due to slowing demand as Bitcoin’s price rises or because there is a limit to the risk appetite for cryptocurrency exposure. Conversely, from a bullish standpoint, certain traders believe in a "snowball effect” where the increasing Bitcoin price “further inspires” ETF sales, as suggested by JP Morgan analysts.JPM makes a strong point here. ETF inflows are a snowball effect. Bitcoin narrative is sticking. Blackrock knows this. Everybody plainly sees it. Now they’re about to deploy the world’s best sales team on leveling up the fund. We’re still in the 1st inning. Halving in pic.twitter.com/AEjCEXPNEN— Beanie (@beaniemaxi) February 29, 2024


Trader beaniemaxi expressed their opinion on X social network, suggesting that both BlackRock and the remaining spot ETF issuers have incentives to deploy their sales teams because the "Bitcoin narrative is sticking." This implies that there is still a considerable distance to cover before the inflows begin to diminish. The post also highlights the Bitcoin halving trigger, indicating that ETF issuers have a compelling selling argument.


However, all these hypotheses could be invalidated if the economy undergoes a severe recession or if investors are compelled to liquidate profitable positions to meet increased financing costs elsewhere. Economist David Rosenberg predicts an 85% likelihood of a U.S. economic recession in 2024. He emphasizes that the stock market would "suffer greatly" in the event of economic contraction.Bitcoin derivatives reflect a balanced demand between bulls and bears


To gauge the discomfort of professional traders with Bitcoin, despite the impressive 45% gains in February, one must examine the BTC options markets. The 25% delta skew serves as an informative indicator, revealing when arbitrage desks and market makers are charging excessively for upside or downside protection.Bitcoin 2-month options 25% delta skew. Source: Laevitas


The Bitcoin options 25% delta skew has remained neutral since Feb. 20, fluctuating between -7% and +7%. This suggests a balanced pricing between call (buy) and put (sell) options. Interestingly, traders became less optimistic just six days after Bitcoin failed to breach the $52,500 mark. This underscores the anxiety among cryptocurrency investors during accumulation phases.


Regardless of whether market makers are offering downside protection at a discount compared to upside exposure, it is essential to cross-check data from BTC futures markets to gauge the positioning of top traders. This indicator consolidates positions across spot, perpetual, and quarterly futures contracts, offering a comprehensive view of how bullish or bearish these traders are.


Related:Coinbase users report zero balance bug as Bitcoin price taps $64KExchanges’ top traders BTC long-to-short ratio. Source: Coinglass


The data indicates that top traders at Binance and OKX remained relatively neutral until Feb. 26, at which point they gradually increased net long positions as Bitcoin’s price surpassed $53,000. This evidence partially contradicts the Bitcoin skew data but could be attributed to the forced liquidation of short positions, signifying the abrupt termination of bearish bets.


Additionally, traders at OKX have not even reached their highest monthly level in long-to-short ratios, making it challenging to argue that professional traders are currently bullish. Consequently, if the influx of spot ETFs continues, there is a likelihood that traders who are currently skeptical will need to catch up.


This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.# Bitcoin# Bitcoin Price# ETF# Markets# Binance# Bitcoin Options# OKXAdd reactionAdd reaction

News Feed

Crypto VCs are back in action amid market rally
Zhiyuan Sun8 hours agoCrypto VCs are back in action amid market rallySeries funding rounds have sprung back, albeit still remaining well below their all-time highs of $4.5 billion in monthly deals during the previous cry
Felix Roemer10 hours agoCrypto scams are going to ramp up with the rise of AIRemember HarvestKeeper, the AI project that scammed users for $1 million? You can expect similar AI-based scams to soar over the next couple of
Axie Infinity co-founder loses $9.7M in 3,248-ETH wallet hack
Arijit Sarkar2 hours agoAxie Infinity co-founder loses $9.7M in 3,248-ETH wallet hackTwo personal crypto wallets of Jeff “Jihoz” Zirlin got compromised, allowing the hacker to walk away with $9.7 million worth of Eth
Biggest Movers: LUNA Falls to 6-Week Low, as ALGO Surges 15% on Saturday
Biggest Movers: LUNA Falls to 6-Week Low, as ALGO Surges 15% on Saturday Despite Terra buying $1.5 billion worth of BTC this week, LUNA slipped to a six-week low to start the weeke
Blackrock CEO on FTX Collapse: Most Crypto Companies Aren’t Going to Be Around
Blackrock CEO on FTX Collapse: Most Crypto Companies Aren"t Going to Be Around The CEO of Blackrock, the world’s largest asset manager, says that most crypto companies will n
Binance Lists MyShell (SHELL): HODLer Airdrops and Rewards Explained
Binance has announced the listing of MyShell (SHELL) as the 10th project on the HODLer Airdrops page, rewarding users who participated in BNB Simple Earn and On-Chain Yields subscriptions.
Taiwan establishes association to help crypto firms self regulate
Turner Wright4 hours agoTaiwan establishes association to help crypto firms self regulateThe association was formed after the country’s Justice Ministry proposed AML amendments for crypto firms that could result in pen
Bitcoin and Ether can ‘greatly improve’ portfolio performance: BBVA
Zoltan Vardai11 hours agoBitcoin and Ether can ‘greatly improve’ portfolio performance: BBVABitcoin’s price has outperformed the returns from the S&P 500 more than threefold in 2024.1736 Total views6 Total shar
Mainland China to ‘unban’ Bitcoin? Community says ‘unlikely’
Helen Partz10 hours agoMainland China to ‘unban’ Bitcoin? Community says ‘unlikely’Mainland China has repeatedly banned certain activities related to Bitcoin, but it has somehow still remained a major player in a
Crypto Market Values Nosedive Amid Global Market Meltdown, Widening Default Risks
Crypto Market Values Nosedive Amid Global Market Meltdown, Widening Default Risks Crypto markets have dropped a great deal in value over the last 24 hours as crypto assets across t
BNB Coils For Impact: Will $670 Crack Under Pressure?
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Investor shares story of falling victim to $100K crypto hack
Ezra Reguerra11 hours agoInvestor shares story of falling victim to $100K crypto hack“I thought that my heart would stop,” said Matthias Mende, who told Cointelegraph how he felt when he realized he lost $100,000 in