Deribit and CME, main players in the Bitcoin (BTC) options market, have given only a 9% probability for BTC to rally to its historical high of $20,000 by the end of this year.
Historically, Bitcoin has exhibited steady uptrend for six to eight months, after the completion of a halving event. Considering that, option market traders are slightly guarded about Bitcoin’s medium-term trend.
In the months ahead, several crypto traders on both Deribit and CME have an optimistiv view on the price of Bitcoin.
As per data provided by ecoinometrics, 22 call options were traded for every put option on the CME Bitcoin options exchange.
This implies 22 people anticipate an uptrend in the price of Bitcoin for every person who expects the price to go down.
The positive view of options traders about Bitcoin’s short-term trend is based on the fact that the numero uno crypto, in terms of market capitalization, has been continuously testing the $10,000 resistance level.
When a major support or resistance gets tested for three to four times, there is a high probability of getting breached. In the past eleven days, Bitcoin has tried to cross $10,000 level for five times, softening the resistance.
Options traders, who are mainly seasoned traders, expect Bitcoin’s price to breach $10,000 in the short-term on the basis of rising bullish sentiment towards high-risk investment vehicles.
In general, Bitcoin’s price follows volatile cycles. It is believed that vigorous buying and selling by whales at low and high levels causes huge price swings in Bitcoin.
Considering the uncertain environment, options traders may not find it easy to take medium to long-term positions in the options market. In earlier halving events, Bitcoin started rallying after six to eight months.
On that basis, the halving event that took place earlier this month may not trigger a rally immediately. Therefore, the probability of BTC hitting an all-time high this year is minimal.
There are numerous positive data points that back forecasts of a new record high Bitcoin price in 4Q20. For example, Bitcoin is on the edge of witnessing the seventh golden cross in the history, if the BTC price stays above $9,500 in the days to come.
Bitcoin is also far off from the oversold state, when analyzed in higher-time frames. The weekly chart indicates that several momentum oscillators signal that uptrend is intact and can continue into the $10,000 to $11,000 range.
Both the golden cross and weekly MACD indicators point to short-term trend, which fuel bullish view in the options market.
Currently, multiple characteristics of Bitcoin, including volatility in extremely uncertain conditions such as this, caused by Covid-19 outbreak, are making option traders to remain extremely cautious while making long-term trend forecasts.
