- Bitcoin price hovered at a high of $44,000, and Ethereum sustained above $2,300 early on Friday.
- Options data shows whales are adding to their bearish positions at a time when market sentiment is bullish.
- Greeks.live analysts said options delivery data points at potential plunge risks in crypto.
Bitcoin price sustained above $44,000 on Friday, and 87% of BTC holders are currently profitable. Similarly, Ethereum price is $2,308 on Binance, after the altcoin’s recent breakthrough past the $2,300 barrier.
Options data analysts at Greeks.live observed that the market is showing mixed signals. Analysts noted that whales have added to their bearish positions in BTC and ETH while the sentiment among market participants is neutral to bullish. This requires traders to be wary of downside risk when trading these cryptocurrencies.
Also read: Three altcoins poised for bullish break: Fantom, MATIC and DENT
Options market show mixed signals to traders
On December 22, according to Greeks.Live options data, 25,000 BTC options and 217,000 ETH options are about to expire. For Bitcoin, the biggest pain point is $42,000 and for Ethereum it is $2,200.
With the massive spike in cryptocurrency prices throughout December, rise in inscriptions (a new way to write and store arbitrary data in blockchains), and a large number of protective put options being traded this week, analysts point at potential “plunge risks” in cryptocurrencies.
The optimism surrounding the Bitcoin Spot ETF increased as Fox Business reported that sources close to the Securities and Exchange Commission (SEC) stated that an approval is likely by January 10. With the odds of a Spot BTC ETF approval being significantly higher than they have been in years, there is an increase in positions in January, large-scale positions are still in progress.
Bitcoin Open Interest data. Source: Greeks.Live
On Friday, analysts noted two block trades with an exercise price of $3,000 being completed with a total nominal value of $34 million. Large wallet investors are buying ETH call options in large volumes, owing to the altcoin’s strong correlation (3-month correlation is 0.86 as seen on Macroaxis) with Bitcoin and the upcoming bullish catalysts for BTC:
- Likely approval of Spot Bitcoin ETF in January 2024
- BTC halving in April 2024
Analysts warned traders of a possible sudden plunge in asset prices as Christmas holidays are around the corner, European and American traders are less likely to participate in many transactions. The declining liquidity in the market could result in a sudden surge or decline in crypto prices.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
FLOKI rallies 9% on Tuesday, proposal to burn over 15.2 billion tokens is in the voting process
FLOKI holders are currently voting on a proposal to burn over 15.24 billion tokens, with 99% of the voters in favor of the event. The meme coin rallied 9% on the day on Binance.
Top 3 meme coins price prediction Dogecoin, Shiba Inu and Bonk: Memes wipe out gains from GameStop rally
Meme coins Dogecoin, Shiba Inu, and Bonk rallied alongside top meme tokens in response to GameStop’s rally on Monday. As legendary trader “Roaring Kitty” resurfaced on X with a series of tweets, meme tokens rallied, piling gains on Monday.
Arbitrum price sets the stage for 30% recovery rally Premium
Arbitrum (ARB) price is showing signals that suggest the downtrend could be coming to an end. If this development is coupled with improving Bitcoin price outlook, then ARB could be due for a quick move to the upside.
XRP climbs above $0.50 as Ripple files motion to seal documents in connection with SEC lawsuit
Securities and Exchange Commission (SEC) lawsuit against Ripple saw an update as the payment remittance firm filed a motion to narrowly seal documents related to the remedies-phase.
Bitcoin: Why BTC is close to a bottom
Bitcoin (BTC) price efforts of a recovery this week have been countered by selling pressure during the onset of the American session. However, the downside potential appears to have been capped.