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Highlights
- Bitcoin Options Market Signals Bearish Sentiment After Peak Attempt
- $11.8 billion in Bitcoin options set to expire in December.
- Volatility remains stable despite profit-taking activity.
Bitcoin, the leading cryptocurrency by market cap, is showing signs of shifting sentiment among options traders following its inability to surpass the significant $100,000 milestone. Recent data from options trading platforms indicate a shift toward protective strategies, signaling market caution. This comes after Bitcoin reached $99,830 on November 22 before falling over 8% to $91,377.32 by Tuesday.
This year, Bitcoin has recorded a remarkable 120% growth, with a significant 34% increase in November alone, influenced by political developments in the United States. The election of pro-crypto policymakers, including former President Donald Trump, who pledged to make the U.S. the "crypto capital of the planet," has bolstered market optimism. However, the recent price dip has prompted a wave of profit-taking among long-term holders, contributing to the pullback.
Market dynamics are now focused on the expiration of $11.8 billion worth of Bitcoin options on December 27. Trading data reveals a notable decline in the call-put skew index, reflecting growing interest in hedging strategies. The index, which measures the difference in implied volatility between calls and puts, has seen a sharp 30% drop in the past 24 hours, according to Derive, a decentralized options trading protocol with a trade volume of $7.1 billion. Although calls remain dominant, their preponderance has diminished, signaling a cautious stance from traders.
Bitcoin’s price movements are expected to stay volatile in the coming weeks. Projections estimate a 68% probability of Bitcoin moving either 16% lower to $81,493 or 19% higher to $115,579 by December 27. A smaller probability points to extreme scenarios, such as a 29% drop to $68,429 or a 42% surge to $137,645. Interestingly, the probability of Bitcoin surpassing $100,000 has increased to 45% from last week’s 34%.
Volatility levels remain stable, with the seven-day implied volatility at 63% and the 30-day at 55%. Analysts interpret this as a sign that significant market moves could be imminent.
Recent reports highlight that long-term holders offloaded $60 billion worth of Bitcoin over the past 30 days, accounting for 21% of distribution since its bottom during the FTX collapse. Analysts from _checkonchain.com note this as one of the heaviest profit-taking periods of the current cycle.
Bitcoin’s journey remains one of both opportunity and caution as traders prepare for potential market shifts ahead.
