Bitcoin Options Tease $34K BTC Prices: Analysts Confirm Rally

There is a surge in Bitcoin options open interest ahead of US inflation data and after PayPal's stablecoin move.

The data from options show that Bitcoin could move quickly towards $32k and then towards $34k. Further, experts are also predicting a quick price move.

In this article, we will decode the signals from Bitcoin Options markets and will take a look at recent developments that could send Bitcoin prices above their two month highs.

At the end of the article, we have quoted a few experts and their confirmation of a Bitcoin rally.

What Bitcoin Options Market Says?

Bitcoin Options have surged in the last 48 hours. Derebit Bitcoin derivatives data shows that option open interest had surged by 2.18% and overall open interest has surged by 6.59% by press time. However, options open interest has declined by about 40%.

Open interest in the total value of Bitcoin Options that are being traded in the market. A surge in open interest usually means that more people are taking part in trading and is generally considered a bullish signal.

Open Interest Volume Drops by 40% on Derebit, Possible Short Squeeze

Derebit, the largest Bitcoin derivatives exchange has witnessed a large reduction in options open interest volumes. This means that older trades are being withdrawn from the markets.

As older trades were generally on the short selling side, their withdrawal means that Bitcoin might move upwards. This situation is also called as a short-squeeze.

We can also confirm this short squeeze by taking a look at the Long/Short ratio which is now at 1.08 i.e., there are more people betting on a price rise than price decline in Bitcoin.

Prices Can Easily Move Beyond $30,000 Says Options Data

We can see from the graph that the red bars (Puts) are the ones which bet on Bitcoin's price rise and the green bars (Calls) are the ones which bet on Bitcoin's price fall. A balance between the two can help us assess the future price of Bitcoin.

Highest put options are on $26,500 and $28,000 which means that these prices are rock bottom for Bitcoin currently. The highest call options are on $34,000 and $40,000.

The lack of call options near $30,000 shows that currently traders are confident enough of a price move beyond $30,000 and might reach $34,000 in the best case scenario.

What Led to Bullish Markets?

Bitcoin prices have been very dull since the last month. There was a downward move towards $28,000 but the prices recovered soon confirming that $28,000 is a strong support.

The markets also witnessed extremely low volatility in Bitcoin prices which could give rise to a Bollinger Squeeze and shoot Bitcoin prices upwards with $28,000 as support.

Further, the failure of SEC to file an appeal against Ripple, also boosts market sentiments.

Bitcoin has also seen wide support from presidential candidates including Robert F. Kennedy, Jr. He has also confirmed a Bitcoin purchase of $250,000 recently which marks a positive outlook among US politicians.

Also the US Federal Reserve could be close to pause the interest rate hikes after raising them to 5.25%-5.50%. However, the decision rests with the inflation data on Aug 09, 2023. The US inflation data is also expected soon within the next few hours.

What are Analysts Saying?

Experts like Cathie Wood predict a $150k Bitcoin with institutional investment. Cathie is the CEO of Ark Invest which has filed a Bitcoin ETF application and might be the first in line for approval.

Charlie Shrem has predicted that the PayPal's stablecoin move will further push the Bitcoin price upwards. Charlie if the Founder of Bitcoin Foundation and is featured in Forbes Magazine.

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