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Bitcoin is up on Friday as ether options traders are overwhelmingly bearish.
“Crypto has had a good run for about three weeks in a row since late July,” said David Lifchitz, chief investment officer for quantitative trading firm ExoAlpha. “There is a current resistance level of $ 12,500 per bitcoin, which seems quite normal as markets, even cryptocurrencies, cannot rise in a straight line day after day.”
In fact, over the past month, bitcoin hit a high of $ 12,130 before dropping. According to Lifchitz, this signaled that there will likely be a downsizing before a move to further highs in 2020. “A slight pullback could also be in the cards in the next couple of weeks, but without any special bearish events, this shouldn’t be a concern and the next major move from here should be on up, “he added.
The bitcoin options market seems to agree with Lifchitz. Options expiring on August 20 show that traders give bitcoin a 75% chance of exceeding $ 11,000, while only a 21% chance of hitting $ 13,000 by next Thursday, according to data aggregator Skew.
Traders can be temporarily distracted by more shiny items at the moment. Alessandro Andreotti, an over-the-counter cryptocurrency trader, says decentralized finance, or DeFi, is taking the spotlight from bitcoin, but that it won’t last. “Where I see opportunities right now are DeFi tokens, which are performing incredibly well,” he told CoinDesk. “I feel the bulls will be back for bitcoin soon, though.”
Ether (ETH), the second largest cryptocurrency by market capitalization, grew on Friday trading around $ 442 and climbing 12.1% in 24 hours at 20:00 UTC (16:00 ET).
The ether options market has more open interests (open positions) than ever, in the amount of $ 463 million on the Deribit and OKex platforms, according to Skew. But it’s not necessarily bullish for the ether. Sentiment from traders appears to view Ether’s valuation as unsustainable. A huge number of options bets are on ether below $ 410.
Chris Thomas, head of digital assets for Swissquote Bank, said some traders are likely worried that the current Ethereum-based DeFi frenzy will not be able to continue for the rest of 2020. This contributes to bearish sentiment. “Maybe some traders think Ethereum has gone too far this year,” he said. “With high gas tariffs, will it create a problem for the DeFi ecosystem in the coming weeks?”
The digital assets on CoinDesk 20 are mostly on green Friday. Notable Winners at 8pm UTC (4pm ET):
Notable Losers at 20:00 UTC (16:00 ET):
