According to data from Kaiko, a bullish bias persists for Bitcoin options despite the recent market volatility.
Last week, Bitcoin experienced volatility, briefly dipping below the $57,000 mark before experiencing a weekend rebound fueled by easing concerns over Fed interest rates.
Bullish Shift in the Bitcoin Options Market
The decline in Bitcoin’s price last week proved advantageous for put options set to expire at the end of May. Put options within the $57,000 to $60,000 range briefly entered the money, offering profitability to holders amidst macroeconomic headwinds.
Puts, which grant holders the right to sell the underlying asset at a predetermined price, constituted approximately 28% of the volume on Deribit for the May 31 expiry. Traders holding these positions were either hedging their portfolios or anticipating further price declines.
However, as bitcoin’s price recovered above $64,000, these put options are not profitable anymore, with call options in the $60,000 to $65,000 range returning to profitability. Over $600 million worth of call options with a strike price of $80,000 remain out of the money.
Despite this shift, calls continue to outnumber puts in terms of volume, signaling an overall bullish outlook among market participants. Looking ahead, Bitcoin options contracts set to expire on September 27 are dominated by call options, with a strike price of $65,000 emerging as the most popular choice.
This indicates that just over $300 million worth of call options will be profitable if bitcoin maintains a price above $65,000 by the end of September, suggesting a widespread bullish sentiment toward prices hovering around all-time highs by that time.
Meme Coins Lead in Leverage
Meanwhile, while the recent market correction has led to declines in the value of many meme coins, some have maintained their dominance in leverage among the top 30 altcoins by market capitalization.
Kaiko reports that Pepe (PEPE) and Dogwifhat (WIF) stand out with leverage ratios double that of other altcoins. Following closely is Filecoin’s FIL token, which experienced a rally following its integration with Solana in mid-February, trailed by Bitcoin Cash (BCH).
Derivative markets heavily influence crypto prices, especially for altcoins, due to traders’ speculative nature. The open interest to market cap ratio indicates the extent of trading compared to a cryptocurrency’s total value. Higher ratios imply that prices are mainly determined by trading in derivative markets rather than other factors.
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