Bitcoin derivatives data suggests a BTC price pump above $18K won’t be easy
1 min read
Traders might rejoice now that Bitcoin price ventured above $17,400, but 27 long days have passed since Bitcoin (
Options are pricing similar risks for upside and downside
The 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.
In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 10%. On the other hand, bullish markets tend to drive the skew indicator below -10%, meaning the bearish put options are discounted.
The delta skew bottomed at 8% on Jan. 9, signaling that options traders are pricing similar risks for upside and downside. More importantly, the current level is the lowest since Nov. 8, or since the FTX exchange implosion.
Even if there’s no appetite for leverage longs using Bitcoin futures, the whales and market makers trading options are getting more comfortable with $17,000 becoming support.
Although there is no evidence that a pump to $18,250 is in the making, at least traders are less risk-averse, according to derivatives data.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
