BTC has registered its first three-week winning trend since February.
Dealers have seen massive call buying activity at the $75,000 strike price and beyond and put selling, according to Amberdata.
Bitcoin (BTC) has notched its first three-week winning streak since February, according to data source TradingView. The upswing has been characterized by traders buying call options, offering an asymmetric upside potential above $75,000.
The leading cryptocurrency by market value rose over 3% in the seven days to Sept. 29, extending over 7% price increases that occurred in each of the previous two weeks. China’s large stimulus announcement and inflows into the U.S.-listed spot ETFs, equivalent to more than a month’s supply of newly mined BTC, likely helped the cryptocurrency maintain the upward trajectory.
As prices rose, dealers saw massive call buying activity at the $75,000 strike price and beyond on crypto exchange Deribit, according to order flow tracked by Amberdata. Investors also sold put options.
“This flow pattern suggests a bullish outlook for spot prices (due to the put selling) while also anticipating an acceleration in price movement,” Amberdata’s Director of Derivatives, Greg Magadini, said in a note shared with CoinDesk.
A call option gives the holder the right but not the obligation to purchase the underlying asset, BTC, at a predetermined price at a later date. A call buyer is implicitly bullish on the market, while a put buyer is bearish, looking to hedge against price swoons.
The bullish flow of increased call buying and put selling suggests expectations that prices will soon break out of a six-month-long corrective trend, referred to as the “expanding triangle” by veteran analyst Peter Brandt.
A potential break out would mean the broader uptrend from October 2023 lows under $30,000 has resumed.
“A break above $75K could lead to a swift rally through all-time highs toward $100K, where the last tranche of call buyer activity is concentrated in the December 27, 2024, expiration,” Magadini said.
