Share this article

Bitcoin Options Market Suggests Investors Preparing for All-Time High

Options investors appear to be eyeing more gains for the top cryptocurrency, which is now just 2.8% below a record high.

Updated Sep 14, 2021, 10:35 a.m. Published Nov 25, 2020, 12:35 p.m.
bull statue-2905489_1920

Activity in bitcoin's options market shows investors are eyeing more gains for the top cryptocurrency, which is now just 2.8% below a record high.

STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters

Bitcoin's one-month implied volatility, which is influenced by demand for call (bullish) and put (bearish) options, has risen to 81%, the highest level since May, having begun the month at 58%, according to data source Skew.

The major part of the move (from 60% to 81%) occurred over the past five days. The three- and six-month implied volatility metrics have also jumped to multi-month highs.

"The recent spike in implied volatility is the result of a decent chunk of call buying," Vishal Shah, an options trader and founder of derivatives exchange Alpha5, told CoinDesk. "Investors are positioning for a bull market continuation."

Advertisement

Bitcoin implied volatility
Bitcoin implied volatility

Further, put-call skews, which measure the spread between the cost of puts and calls, are hovering near record lows. In other words, call options have been drawing more robust demand than puts, a sign of investor expectations being skewed to the bullish side.

Bitcoin put-call skews
Bitcoin put-call skews

A week ago, the skews witnessed a bounce from lifetime lows as some traders bought put options following bitcoin's sudden pullback from $18,400 to $17,100.

However, the price dip was short-lived and the cryptocurrency rose above $19,000 on Tuesday. As such, call buying continued, pushing the skews lower once more.

At press time, the one-month metric is seen at 24%, having reached a low of 27.8% on Nov. 17.

Meanwhile, bitcoin is trading near $19,300, representing a nearly 1% gain on a 24-hour basis, according to the CoinDesk 20. Prices have risen by over $9,000 in the past 6.5 weeks.

Advertisement

On-chain data also favors an extension of the ongoing bull run. For instance, bitcoin's trade intensity, which measures the number of times each coin deposited on a spot exchange is traded, rose to 7.28 on Tuesday, the highest level since June 7, according to Chainalysis.

The metric shows demand is still strong, and suggests the market could absorb a potential rise in supply. However, holding sentiment remains strong, as evidenced by the continued decline in the number of coins held on exchanges.

Bitcoin: Balance on exchanges
Bitcoin: Balance on exchanges

Some investors, though, may look to take profits if and when the cryptocurrency scales the $20,000 mark.

“We could see massive movements in the bitcoin price over Thanksgiving," said Peter Smith, co-founder and CEO of Blockchain.com in an emailed statement. "A new all-time-high won’t be a surprise to some who’ve seen it as a ‘not if, but when’ scenario. It’s an inevitability, but the world will take notice, and that’s good for adoption.”

Also read: First Mover: Why Is Bitcoin’s Price Rising? Here Are a Few Possible Answers

More For You

Exchange Review - March 2025

Exchange Review March 2025

CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.

What to know:

Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.

  • Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
  • Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions. 
  • Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.

More For You

This article is created to test tags being added to image overlays

Consensus 2025: Zak Folkman, Eric Trump

Dek: This article is created to test tags being added to image overlays

What to know:

  • Ethena's USDe becomes fifth stablecoin to surpass $10 billion market cap in just 609 days, while Tether's dominance continues to slip.