By
Steve Muchoki
April 17th, 2024
The Bitcoin Open Interest statistics also depicted strong puts at $10,000, $15,000, and $16,000.
Bitcoin options traders are anticipating the price of Bitcoin to rise back again to $30,000, according to Glassnode data analyzed by CryptoSlate. The data also revealed that Ethereum is also expected to make a big leap in the fourth quarter.
Implied volatility has been highlighted as the main factor behind the optimistic outlook on the price of Bitcoin. As implied volatility stabilizes, bullishness may be developing, and Bitcoin options traders are now piling into calls at $30,000.
Implied Volatility (IV), a gauge frequently used to price options contracts, measures how the market perceives the likelihood of price movements in a certain asset. IV typically rises when the market is in a bear market and falls when the market is in a bull market.
IV is usually expressed in percentages and standard deviations over a specific period and can be used as a stand-in for market risk.
A standard deviation (SD), measured in terms of the mean average, describes how dispersed or distributed the data is. Implied Volatility tracks anticipated price movements within one standard deviation over a year. The metric is further enhanced by defining IV for options contracts expiring in 1 week, 1 month, 3 months, and 6 months from the present.
The latest data from Glassnode analyzed by CryptoSlate showed that Bitcoin IV has since dropped from its summertime highs before stabilizing and becoming less volatile in the second quarter of the year. Based on past instances of IV dropping, this can be a sign that bullish conditions will develop in Q4.
The Bitcoin Open Interest statistics also depicted strong puts at $10,000, $15,000, and $16,000. While bitcoin options traders have indicated a massive number of calls for BTC above 30,000, worth over $1 billion, the ratio of puts to calls indicates that traders anticipate Bitcoin to increase in value, with a typical price objective of $30,000.
Open Interest (OI) refers to the total number of unresolved derivatives contracts, in this case, options.
Puts are the right to sell a contract at a predetermined price by an expiration date. In comparison, calls are the right to buy a contract at a particular price by an expiration date.
Ethereum’s Open Interest also shows a similar pattern to Bitcoin, as calls dominate. Calls at $3,000 toppled all other prices, both puts, and calls.