Highlights
- Bitcoin’s medium-term implied volatility has dropped below 50% showing caution among traders.
- 3,643 Bitcoin options block calls were traded representing 24% of the day’s total trading volume.
- 80% of Bitcoin short-term holders are in loss which can trigger further panic sell-off in short term.
After a long period of dormancy, the Bitcoin options block trading has seen a significant resurgence clocking notable activity to more than $500 million in notional value. The recent trading activity suggests that traders have turned more bearish despite the Bitcoin (BTC) price attempting a reversal surging past $61,000 as of press time.
Bitcoin Options Block Trading Outlook
Data from Greeks.Live suggests that 3,643 Bitcoin options block calls were traded representing 24% of the day’s total trading volume. On the other hand, 2,084 BTC block put options accounted for 14%.
The recent data shows that Bitcoin’s medium-term implied volatility has dropped below 50%, which shows that major market players and BTC whales have a cautious outlook on this month’s market trend. Over the last month, the Bitcoin bulls have faced repeated rejections at $60,000. Thus, with the Bitcoin price now trading 4.32% up above $61,000, it will be interesting to see whether the bulls can take charge further from here. All eyes will be on the Jerome Powell speech after the FOMC meeting on Wednesday, August 21.
Moreover, Greeks.Live also reported that the Ethereum options have also seen substantial activity with 31,430 ETH block call options making up 20% of the day’s trades and 28,488 ETH block put options contributing 18%. Thus, this shows that the entire focus of crypto traders currently is on selling call options and buying put options.
Block trading, which has been dormant for days, is back on fire, with significant growth in block trades traded today, with a notional value of over $500 million.3,643BTC block call options traded, accounting for 24% of the day’s total trading, 2,084BTC block put options traded,… pic.twitter.com/Ks7JmZ1MMr
— Greeks.live (@GreeksLive) August 20, 2024
On-chain Data Shows Bearish Bitcoin Trend
Furthermore, the on-chain data for Bitcoin has also been flashing strong bearish signals with more than 80% of the Bitcoin short-term holders facing losses with their BTC purchased at a price higher than the current Bitcoin price.
This situation is exactly similar to that seen in 2018, 2019, and mid-2021, hinting a major panic-like situation among a large number of investors while potentially triggering a bearish trend.
Bloomberg commodity strategist Mike McGlone also stated that Bitcoin could soon be leading the reversion of the risk assets. “Born of the financial crisis and quantitative easing, Bitcoin has led most risk assets to this year’s highs and may be doing the same on the way back down,” he said. On the other hand, companies like Metaplanet continue with their Bitcoin purchases with a long-term view in mind.
CoinGape