In December, a total of $ 2.4 billion in Bitcoin options expired, with the price rising sharply in the following weeks
A value of $ 3.7 billion in Bitcoin options is set to expire on January 29, as traders anticipate volatility in the rising prices of cryptocurrencies.
Bitcoin options are contracts that give investors the right, but not the obligation, to buy or sell the cryptocurrency at a specified price within a set period of time. They have witnessed a huge demand, especially among optimistic investors.
As of January 29, about $ 3.7 billion in BTC options may expire. This is more than the $ 2.4 billion BTC options that expired on December 25th.
Traders and observers typically look to the Bitcoin options market to analyze price movements on spot exchanges. Option data suggests that there is now more interest in “call options” than in “put options”. This means that more traders believe the price will rise compared to those who think there will be a retraction from here.
According to Craig Erlam, market analyst at the foreign exchange firm Oanda, the options market reflects Bitcoin’s volatility. “The movements that we see daily now are incredible, so it’s natural that the options are being used more”, Erlam told Markets Insider.
“The creation and adoption of these instruments is a step forward, but it does not diminish how highly speculative an instrument still is,” added Erlam.
The last time any downward feelings were noted was on 10 January. That day, Bitcoin’s price plummeted 15%. The Cointelegraph informed that, at this point, bulls are mostly in control, because the recent price hike has already obliterated most bearish options.
Bitcoin is currently being traded laterally. It closed Monday at $ 36,624 at the cryptocurrency exchange Coinbase. Although the price of the cryptocurrency has fallen by about $ 7,000 compared to the new historical record of just under $ 42,000, Bitcoin is still up 33% in the past 30 days.
On December 16, Bitcoin successfully broke through the previous $ 20,000 psychological resistance and continued its upward price path to current levels.
Analysts looked at growth options and futures markets linked to increasing the flow of institutional investors in the Bitcoin ecosystem. However, the increase in options trading does not mean that the market is safe, especially for investors who are starting to trade.