Bitcoin Options Traders Anticipate Imminent Breakout Above $74K to New Record Prices

Options trading desks saw intense buying activity for BTC purchases as the month of June ended.

Matrixport noted that BTC is “poised to move higher,” with short positions worth approximately $1.5 billion concentrated around $72,000 that can be liquidated.

According to market data, Bitcoin {{BTC}} options traders are increasingly taking positions for the asset to reach new record prices this month.

“Our desk has seen a strong uptrend with significant buying for June expiration, indicating that the options market is positioned towards a decisive breakout from the all-time high of 74,000 this month,” digital asset hedge fund QCP said in a market update on Wednesday. ” said.

Options are derivative contracts that give buyers the right to buy or sell an asset at a certain price before the contract expires or on a predetermined date. If the underlying asset does not reach the strike price (out of money), the option will expire worthless. Buy calls indicate a bullish outlook for the price of an asset, while put option buyers are bearish.

“Option flow was clearly in an uptrend today due to large sizes in long BTC OTM [out-of-money] Institutional crypto derivatives trading network Paradigm said in a Telegram post that the call will spread at the end of June and, to a lesser extent, at the end of July.

Joshua Lim, co-founder of crypto derivatives major trading firm Arbelos Markets, said Tuesday that there was “very heavy call buying” in which approximately 1,100 contracts expiring on June 28 were purchased at strikes of $74,000-$80,000, representing notional demand of approximately $80 million. he stated.

A call spread is an options trading strategy where call options are purchased at a lower strike price and the same amount is traded at a higher strike price at the same expiration date, aiming to profit from a limited price increase.

Bitcoin options heatmap on Deribit (Deribit via Arbelos Markets)

Bitcoin has been consolidating for almost three months since reaching an all-time high of just under $74,000 in mid-March. After briefly falling below $57,000 in early May, it has seen a steady recovery and is now changing hands around $71,000, just a few points away from new record prices.

Crypto investment services firm Matrixport said in its Wednesday

We talked about this yesterday #Bitcoin Futures traders were increasing their positions, and two days ago we mentioned that Bitcoin was about to break out of the bullish triangle formation. Combined with the second largest net purchase of Bitcoin #Stain #ETFs last night, #BTC visible… pic.twitter.com/pZPQi97CXx

— Matrixport (@realMatrixport) June 5, 2024

Matrixport noted that a rally above the $72,000 level could lead to a short squeeze, as $1.5 billion worth of leveraged futures contracts are betting on lower prices concentrated around this range that could be liquidated, exacerbating the upside move.