Bitcoin’s CME options soar high and might impact Bitcoin Spot Prices
While Bitcoin has held a price position above $9,500 over the past 48 hours, the largest digital asset has struggled to break into the $10k mark. With the Bullish Rally symbolic over, the group hypothesized that Bitcoin may have completed its rapid upward movement.
However, the optimistic existence of the derivatives market has held up the expectations of the Bitcoin group.
Over the past week, Bitcoin’s options markets have been on the rise for CME. According to skew data, the total volume traded during the month of May amounted to more than $150 million, which is huge growth, considering that CME only caters to institutional investors in the industry.
As seen in the chart above, the overall Bitcoin Open Interest options over the past few days have been at an all-time high, with more than $142 million contracts being exchanged.
Now since the volatility of halving has gradually decreased, the probability of an imminent price crash has been fairly small. Such a scenario seemed appealing to institutional investors, and recent figures showed that people were pressing for more bullish positions in the charts. Although options trading was a little more complex than futures, the absence of liquidation risks made it a viable choice.
Speaking of futures trading, the total open interest of BTC futures on CME continued to be highly active even after the OI had hit its all-time high of $499 million two days earlier.
Additional data indicated that while $115 million worth of positions were long in BTC’s future, hedge funds and family offices had higher leveraged funds and other recorded shortfalls, which together led to 11,100 BTCs, valued at about $105 million in short-term positions.
Will such narratives help push Bitcoin’s price above $10,000?
The response is yes, but not in a way that the group would anticipate.
The derivatives market does not explicitly impact the price of Bitcoin as it is traded on the basis of the movement of Bitcoin. The bullish existence of the charts obviously dictates a higher degree of operation
Nevertheless, this does not necessarily translate into a direct influence on valuation.
However, Bitcoin CME options contracts and futures both come with an expiry date, and prices typically encouraged change over that time period. A large rise in call-purchase options could theoretically raise Bitcoin’s near-expiry price, thereby ultimately moving the asset above $10,000.
While nothing is exactly fixed in stones on the Bitcoin market, BTC is not at the wrong position to process higher price depreciation at the moment. A correction process can take place over the long term, but prices can increase marginally over a short duration of 2-3 weeks.