Kooner added that as the market attempts to move past the crucial $50,000 psychological level, many long-term bullish traders are purchasing these cheap call options with strike prices much higher than current bitcoin prices.
“These strike prices represent significant highs above the previous cycle,” he told The Block.
Bitcoin call options ahead of February’s end-of-month expiry concentrate at strike prices above the $50,000 mark. Image: Deribit.
The concentration of bitcoin calls at the $60,000 strike price and above suggests that a significant proportion of market participants have a particular interest or expectation that the price of bitcoin will rise above this level ahead of the next end-of-month expiration date.
BTC options market weighted toward longs
According to Kooner, the options market is heavily biased toward the long side. The Bitfinex analyst said that since bitcoin crossed the $48,000 mark, there is now an increasingly large number of call spread positions in the derivatives market.
“The current overall open interest spread is biased towards calls at a 0.47 put-call ratio. The overall market put-call ratio in the past 24 hours is 0.60. A ratio of 0.59 based on options expiring on February 23 extend the current trend,” he added.
A put-call options ratio below one indicates that the call volume exceeds the put volume, signifying bullish sentiment in the market. It is assumed that a trader who buys call options is implicitly bullish on the market, while a put buyer is bearish.
The price of bitcoin has fallen below the $49,000 mark. Image: The Block.
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