Bitcoin options traders predict massive surge in BTC price in the first half of 2023

Bitcoin, the largest cryptocurrency by market capitalization witnessed a spike in demand for bullish calls tied to the asset. BTC price topped its 200-day moving average for the first time since April 2021 fueling a bullish narrative among options traders. 

The crypto ended the week on January 13 yielding 20% gains, the highest weekly percentage gain since February 2021. 

Also read: Bitcoin price wipes out losses from FTX exchange collapse, hits $21,095 after two months

Bitcoin options traders are bullish on BTC gains

Bitcoin price yielded 20% gains in the week between January 9 and 16. The bullish sentiment among options traders is evident from the renewed premium in BTC futures listed on the Chicago Mercantile Exchange (CME). 

The front-month contract expiring on January 28 hit a four-month high of $21,535, while Bitcoin price on spot exchanges hit $21,437. The bullish sentiment among options traders is consistent with the improvement in the macroeconomic outlook and risk revival in the traditional market. 4

Bitcoin’s bullish call options expiring in six months have become pricier than the bearish put options, based on data from crypto intelligence tracker Amberdata. The 180-day call-put skew is a metric that measures the price for calls relative to puts and is a good measure of consensus in the community for the next six months. 

Bitcoin Skew constant maturity 

As seen in the chart above, both short-term and long-term call-put skews have turned positive for the first time since April 2021. Both institutions and retail investors use options to speculate and hedge against future shifts in the price of Bitcoin.

The flow of Bitcoin options gives an insight into the technical levels of support and resistance for market participants. The February purchases of $22,000/ $24,000 calls came in when Bitcoin exchanged hands at $19,000 on spot exchanges.