We are back to making an attempt to take over $10,000.
After last week’s stab at $10k, bitcoin went down to $9,000 level and on the weekend we started climbing back up. However, according to trader Crypto Michael, we need to be “skeptical” about weekend movements because more often than not, they end up being a “trap.”
Also, there is a CME gap from $9,295. And this is certainly the case as from the high of $9,966, we moved back below $9,500 today.
But if bitcoin clearly breaks above the $9,800 and $10,100 area, the trader is targeting the $11,400 and $11,600 area next.
All the bullishness
Meanwhile, co-founder and CEO of crypto derivatives exchange BitMEX, Arthur Hayes is pretty confident in bitcoin’s uptrend just as he always has been.
“A gunslinger never sits with his back to the entrance. Watch the backend, XBTU20, rocket as we tear through 10k,” tweeted Hayes pointing to September futures contracts trading just above $10,000 with the June contracts in Contango as well.
The good thing is bitcoin is trading above all the three moving averages, 50MA, 100MA, and 200MA. Moreover, BTC is also breaking a year-long bull flag.
“And there's still people refusing to call this an uptrend,” said analyst Benjamin Blunts.
However, trader Josh Olszewicz is still waiting for clear long entry signs as despite the price above the cloud, the cloud bear is still there and Kijun, baseline – a component of the Ichimoku Cloud indicator, is sitting at $7,200 which is a support level if we reject heavy at current levels.
Options market enjoying an explosive growth
The highlight of last week however was the options market after investors’ interest on CME bitcoin options peaked to record highs.
The day bitcoin had its halving, the same day daily options trading volume on the CME Group spiked to $17 million, breaking the previous record of $9.9 million. From there, BTC made a hattrick by smashing the previous day's records in the following days at $30 million.
Options volume is the number of contracts traded. They are basically the derivatives contracts that give the purchaser the right to buy or sell the underlying asset at an agreed-upon price on or before the specified date.
The open interest in CME bitcoin options also increased by more than 270% over the past week.
Real money flow still buying puts
The Chicago Mercantile Exchange, however, only accounted for about 17% of total trading volume and 11% of total OI. Panama-based Deribit remains the leader in the bitcoin options market which contributes over 70% of trading volume and 80 to 90% of OI.
After its March 15 bitcoin options expiry, there was a spike in implied volatility. Deribit noted,
“While Derbit considers 50k strikes and S2F models suggest $288k Q3, real money is yet to express that optimism via options since early March (Jun32k x3000+ needs a solid Q2).”
It further points out how despite the recent news flow being “ultra bullish,” “real money flow is still buying puts.”
While a call option is a right to buy, a put option is a right to sell. But not all users and narratives for buying puts are bearish, as “protection can be cautiously bullish.”
“There seem some aggressive buyers still concerned/predicting a retrace. Negative macro events have impacted equity-BTC correlation before.”