Market analysts are drawing attention to the noteworthy concentration of call options for Bitcoin set to expire at the end of March, all with a strike price of $70,000. Bitfinex’s Head of Derivatives, Jag Kooner, reveals this data, indicating a rising optimism regarding Bitcoin‘s (BTC) value.
Kooner underscores the significance of the put-call ratio, a crucial market sentiment indicator, consistently holding below 0.6 for the first time in six months. This pattern suggests a prevailing bullish outlook among traders, as the ratio below 1 signals a preference for calls, indicative of expectations for an increase in the asset’s price.
The global put-call ratio for Bitcoin options, presently standing at 0.6 according to The Block’s Data Dashboard, reinforces the bullish sentiment in the market. A ratio below 1 aligns with a positive outlook, emphasizing a preference for calls over puts, which act as safeguards against potential price declines.
Notably, Deribit’s implied volatility index for Bitcoin has witnessed a noticeable decline, dropping from 77% to 72% in the past 24 hours. This reduction in implied volatility contributes to more cost-effective options premiums, encouraging traders to enter positions.
Options, as financial derivatives, provide traders the choice (but not the obligation) to buy or sell an underlying asset at a predetermined price before a specified date. The concentration of call options, which grant the right to buy, and the decrease in implied volatility collectively reflect a growing positive sentiment among traders in the Bitcoin options market as the March expiry with a $70,000 strike price approaches.
