Bitcoin’s recent surge captivates both retail and institutional investors. Meanwhile, the derivative options market displays elevated activity with shifts in trader sentiment.
- Institutional interest in BTC grew as traders showed expectations of low volatility.
- Short term holders took profits, long term holders stayed put.
As Bitcoin’s [BTC] prices soared over the past few days, many retail investors have showcased interest in the cryptocurrency. However, it wasn’t just retail interest that was driving up BTC’s price. Notably, institutional investors were also showing interest in the king coin.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
Too many options
Additionally, the BTC’s options market was also extremely active over the last few days. After the options expired on Friday, there were $2.75 billion worth of Bitcoin options on Deribit.
The Open Interest (OI) was at levels seen during 2021, sitting at $12.5 billion at press time. The majority of the OI were in December 2023 calls, followed by November 2023 calls.
post expiry updates:
-Friday saw $2.75b ntl of $BTC options expire on deribit. OI remains at 2021 levels at $12.5b, most OI lies in Dec23 calls followed by Nov23 calls.
-strikes: latest below h/t @Amberdataio. last week saw calls rolled out (h/t @tradeparadigm) and thus top… https://t.co/cVcPNKqkh5 pic.twitter.com/uAsOiTAidw— Kelly Greer (@kellyjgreer) October 29, 2023
In terms of specific strike prices, Amberdataio revealed that calls were moved around in the last week, and the top strike prices, which were initially between 29,000 and 32,500, have now shifted up to 40,000.
The highest level of short gamma was at 36,000 at press time, and continues all the way up to 40,000. For context, “short gamma” in finance, especially in options trading, means if you sold options, you’re sensitive to the price changes in the underlying asset, like Bitcoin.
When someone is “short gamma,” it means they’ve sold options, and could face losses if the Bitcoin price starts moving a lot.
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Short term vs. long term
Bitcoin has been impressively steady above $34,000 for five days. However, some long-term holders (STHs) have decided to take their profits, which is one of the biggest profit-taking events in the past two years.
On the other hand, long-term holders (LTHs) haven’t changed their positions. This profit-taking event by STHs is significant this year, however, this amount of profit taking may not make much of an impact in the long run.
