Bitcoin Options Traders Anticipate an Imminent Breakout Above $74K for New Record Prices

• Options trading desks have seen strong buying activity for BTC options expiring in June.

• BTC “poised to move higher” with around $1.5 billion in short positions concentrated around the $72,000 that could be liquidated, Matrixport noted.

Bitcoin {{BTC}} options traders are increasingly positioning themselves for the asset to reach new record prices this month, market data suggests.

“Our desk recorded strong bullish tracking with significant purchases of call options for June expiries, indicating positioning in the options market for a decisive break from 74,000 all-time highs this month,” digital asset hedge fund QCP said in a statement. market update on wednesday.

options are derivative contracts that give buyers the right to buy or sell an asset at a certain price on or before a predetermined date when the contract expires. If the underlying asset does not reach the strike price (out of the money), the option will expire worthless. Buying call options implies a bullish outlook for an asset’s price, while buyers of put options are bearish.

“Options flow was clearly bullish today with large sizes in long BTC OTM [out-of-money] call spreads at the end of June and to a lesser extent at the end of July,” institutional crypto derivatives trading network Paradigm said in a Telegram broadcast.

Joshua Lim, co-founder of leading crypto derivatives trading firm Arbelos Markets, noted “very concentrated call buying” on Tuesday, with around 1,100 contracts purchased with option spreads expiring June 28 in exercises $74,000 to $80,000, representing about $80 million of notional demand.

A call spread is an options trading strategy in which purchases of calls at a lower strike price are made along with sales of the same amount of calls at a higher strike price and with the same expiration. with the aim of profiting from a limited price increase.

Bitcoin Options Heatmap on Deribit (Deribit via Arbelos Markets)

Bitcoin has spent nearly three months consolidating since hitting an all-time high just below $74,000 in mid-March. After briefly falling below $57,000 in early May, it has seen a steady recovery, now changing hands around $71,000, just a few percentage points off new record prices.

Crypto investment services firm Matrixport said in a Wednesday X post that bitcoin “appears poised to move higher,” supported by strong flows into U.S. spot bitcoin exchange-traded funds and rising open interest in the futures market.

A rise above the $72,000 level could induce a small squeeze, Matrixport noted, as there is about $1.5 billion in leveraged futures contracts betting on lower prices concentrated around that range that could be liquidated, exacerbating the upward movement.

´Source