According to Bitcoin options data, crypto traders are currently selling out and are hesitant to place directional bets on the coin’s future transactions. This is the biggest level of investor sentiment toward the coin since May of last year, when more than half of Bitcoin’s value fell.
Arcane Research’s Bitcoin Report
Arcane Research, a crypto market monitoring firm, just produced a report on Bitcoin’s performance. Their analysis revealed that the coin experienced low volatility of more than 70%, indicating that this is the first time options traders have gone in a long-term bearish direction since May of last year.
Meanwhile, Bitcoin options enable traders to speculate on BTC price swings; as the coin rises in value, so will the price of the options. As a result, the low volatility seen suggests that investors are unwilling to speculate on the direction of the primary cryptocurrency. Furthermore, this is the lowest the coin’s choices have been since May 2021.
Furthermore, Arcane Research noted that the coin’s volatility skew has peaked since May of last year. The volatility skew measures the spread between market and call prices. Call options have historically been more expensive than pull options, leading in a downward option skew.
Furthermore, as a result of the recent drop in BTC price, the current BTC option skew has now hit its greatest level since the May 2021 worldwide crypto crash. This shows that the coin has more sellers than buyers, indicating a negative market.
Bitcoin option investors are the most gloomy they have been in a long time. Furthermore, they are hesitant to pick a direction in which they anticipate the BTC coin will go. According to the research, this signals traders to buy low-cost calls.
A Quick Overview of Crypto Options
Options allow traders to speculate on the price movements of an asset. To complete a deal, traders purchase the possibility that the digital asset will reach a predetermined price. It’s also worth noting that volatile asset alternatives are in more demand because they provide more opportunities for leverage. As a result, high-volatility crypto assets have more expensive options.
Despite the chaos, Bitcoin’s price is poised to rise.
Despite traders’ lack of trust and hesitancy in wagering on the direction of Bitcoin options, the coin appears to be on the rise. Bitcoin has formed an upward triangle formation on the 4-hour chart, with a 15% increase from its previous upper boundary.
To reach its bullish milestone, the world’s largest crypto asset must transcend the upper boundary of the existing chart pattern, which is over $44k.