- Some analysts are now unsure of a positive breakout
- Data shows Bitcoin investors are still bullish on the near term
- Bitcoin returns to the positive zone after slight correction
Bitcoin News Today – Digital currency analysts recently said that Bitcoin options traders are turning bearish on the near term outlook of the coin. Nevertheless, data shows that is not the case. Some analysts now doubt the chances of a positive breakout due to the consistent rejection of Bitcoin close to the $9,400 mark over the past three weeks.
Although the digital currency has been able to hold gains over the $9k level for the past 50 days, any slight negative indicator seems to get a lot of attention from pundits and media.
Data Shows BTC Option Traders Are Not Bearish on the Near Term of Bitcoin
Crypto media has been focusing on BTC’s 25 percent skew as proof that options traders are turning bearish in the near term. Nevertheless, there is more to it than just interpreting signals with a single source. Skew is an options-trading concept, and it compares t volatility rates between call and put options within the same expiry date.
If the skew is positive, it means ‘puts’ volatility is larger than that of ‘calls, and this signals a higher insurance cost for a downward price trend. It is easy for one to assume that investors are more bearish since downward protection is costlier than upside protection. Nevertheless, an in-depth analysis shows this is not the case right now.
Bitcoin (BTC) Price Today – BTC / USD
The present level is not something that is seen in history, it is quite the opposite. The most common measure uses 25 percent delta, and this means options are being priced with 25 percent chances of happening.
Even though the downside protection is costlier than the upside protection, one should figure out if investors are effectively buying such options. One can do this by measuring the open interest of call options up to 20 percent from the current price of the digital currency and comparing it to the put options down to 20 percent.
Futures Markets Are Still Bullish
Another very effective way to gauge the sentiment of professional investors is by looking at futures market premium to perpetual and swaps. In a situation known as contango, long-term contracts tend to trade a little bit higher, and this signals a healthy market. The 3-month annualized premium has been at an impressive 4 percent mark, the highest it has seen in thirty days. Hence, there is no indication of fear or investors turning bearish on the futures market.
Bitcoin is even finding its way back to the positive zone after a little correction over the past day. However, the digital currency is still trapped below the $9,400 mark.