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Activity in the bitcoin options market shows that investors are looking at more earnings for the leading cryptocurrency, which is now just 2.8% below the all-time high.
Bitcoin’s one-month implied volatility, which is impacted by demand for call (bullish) and put (bearish) options, rose to 81%, the highest level since May, having started the month at 58%, according to Skew data source.
Most of the transfer (60% to 81%) took place in the past five days. The three- and six-month implied volatility metrics also jumped to a multi-month high.
“The recent spike in implied volatility is the result of a sizable chunk of call buying,” Vishal Shah, an options trader and founder of the Alpha5 derivatives exchange, told CoinDesk. “Investors are positioning themselves for a continuation of the bull market.”
Furthermore, put-call skews, which measure the spread between the cost of put and call, are hovering close to record lows. In other words, call options have attracted more robust demand than puts, a sign that investor expectations are skewed to the bullish side.
A week ago, skews saw a rebound from life’s lows as some traders bought put options following bitcoin’s sudden drop from $ 18,400 to $ 17,100.
However, the drop in prices was short-lived and the cryptocurrency climbed above $ 19,000 on Tuesday. Therefore, the buying of calls continued, pushing skews down again.
At press time, the one-month metric is 24%, having hit a low of 27.8% on November 17.
Meanwhile, bitcoin is trading close to $ 19,300, representing a gain of nearly 1% on a 24-hour basis, according to CoinDesk 20. Prices have risen by more than $ 9,000 in the past 6.5 weeks.
The data on the chain also favors an extension of the ongoing bull run. For example, bitcoin trading intensity, which measures the number of times each coin deposited on a stock exchange is traded, it rose to 7.28 on Tuesday, the highest level since June 7, according to Chainalysis.
The metric shows that the demand is still strong and suggests that the market could absorb a potential increase in supply. However, holding sentiment remains strong, as evidenced by the continuing decline in the number of coins held in exchanges.
Some investors, however, may be looking to take profits if and when the cryptocurrency hits $ 20,000.
“We could see massive movements in the price of bitcoin during Thanksgiving,” said Peter Smith, co-founder and CEO of Blockchain.com in an e-mailed statement. “A new all-time high will come as no surprise to some who have seen it as a ‘not if, but when’ scenario. It’s inevitable, but the world will notice and that’s good for adoption. “
Also Read: First Mover: Why Is Bitcoin Price Rising? Here are some possible answers
