Bitcoin Futures & Options Traders Are Betting on a Big Spike in BTC Price
Another rally seems to be on the way as bitcoin makes yet another attempt to take over $10,000.
Going as high as $9,945, BTC/USD is back at $9,600. This spike in price also resulted in the bitcoin-stocks decoupling.
The thing worth noting here is the Weekly Flag, typically a bullish pattern, which was invalidated by a bearish catalyst in March, now has a bullish catalyst at play.
The “confirmed breakout past the diagonal on the Weekly,” would mean uptrend but price still needs to stay above $9,100 until the end of the week.
“This trendline has been a strong resistance since mid-December 2017. A Weekly candle close would most likely confirm a new era for Bitcoin's price,” said analyst The Rekt Capital.
BTC, USDT, and ETH Dominate
The “real” volume has also started to catch up with the price. In the past 24 hours, over $2.6 billion worth of bitcoin exchanged hands-on top ten exchanges with real volume, as per Messari.
“The market cap of USDT used to follow the bitcoin price. Since September 2019, however, the market cap of USDT has ballooned while the price of bitcoin is more or less unchanged,” noted Arcane Research.
ETH-based USDT is found to be more in use during the Asian and European market hours.
“Stablecoins are a crucial part of the crypto ecosystem, and will only keep growing in prominence,” states the Coin Metrics report.
Futures and Options Market
Bitcoin making its way back to $10,000 has the futures and options market alive as well.
When it comes to bitcoin options, the total interest rate has climbed to a new record of over $1.1 billion.
Interestingly, CME bitcoin options had a third consecutive record volume day with activity in the June calls. Open interest on CME bitcoin options surpassed $100 million for the first time.
Just like Deribit, trading activity here is also focused on calls here, a call option is a bet that prices will rise in the underlying spot market.
Earlier this week, CME bitcoin futures also traded nearly $1 billion in volume but is back below $500 million. Open interest on these contracts has risen to $500 million.
On May 11, CME competitor Bakkt bitcoin futures also had a solid halving session with a record volume in notional value, having crossed $51.8 million. Open interest meanwhile has fallen from $13 million on May 8th to under $9 million.
The June kink is gone. The entire $BTC curve has flipped back into contango. Funding not negative anymore since this morning. Traders bulled up particularly short term. Bitmex still at the baseline though. OI edged higher in the last 48 hours. pic.twitter.com/1WBN7IawFP
— Alex (@classicmacro) May 14, 2020
A heightened interest in bitcoin is surely here which is driven by the central banks printing money, negative interest rates, capital controls, and the fear of inflation and recession.
“We’re seeing a huge increase in interest in Bitcoin, in getting into crypto from high-net-worth individuals, from funds… It feels like a herd is on its way, finally,” said Mike Novogratz, founder and CEO of Galaxy Digital.