Bitcoin Options Market Turns Negative on Short-term BTC Price Outlook, But Longer-term Bullish Bets Remain
Short-term bearish sentiment surrounding Bitcoin has increased, according to options market data. The 25% delta skew of Bitcoin options expiring in seven days have fallen to around -2, indicating that bearish put options are trading at a premium versus equivalent bullish call options. This comes as the cryptocurrency is down around 9% from its multi-month high above $31,000, and has fallen below key short-term support levels. However, despite this, investors remain bullish on BTC’s broader outlook, with the 180-day 25% delta skew remaining at fairly elevated levels of above 3. This suggests that bullish Bitcoin call options are trading at a premium versus equivalent bearish put options. Confidence in Bitcoin’s longer-term outlook makes sense when considering macro factors, on-chain trends, and medium to long-term technical indicators. While there is still uncertainty about when the US Federal Reserve will start cutting interest rates, it is clear that the end of the tightening cycle is near, which means that unfavorable changes to financial conditions are less likely to return as a major headwind to crypto markets. Additionally, Bitcoin is likely to continue to benefit from key recent technical developments, including a spectacular bounce from its 200-day moving average and realized price in mid-March, and a “golden cross” in early February. On-chain and market cycle indicators also suggest that last year’s lows marked the end of the crypto bear market. As such, dip-buyers are expected to be waiting on the sidelines to jump in each time Bitcoin posts significant price dips, just as was the case during mid-March.
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