Bitcoin traders are betting on a rise above $80,000
Sentiment in the bitcoin market (rate at the time of writing $69,711.56 – up nearly 5% for the month) has turned bullish, with traders betting on a rise above $80,000 in preparation for a rally.
The announcement comes from a decentralized exchange that provides cryptocurrency futures and options trading on the blockchain, reports coindesk.com.
“Current options prices show about a 35% probability of BTC surpassing the $80,000 level by the end of June,” Nick Forster, founder of blockchain options platform Derive.xyz, told CoinDesk via email. – “Combined with the recovery of the skiv, this activity indicates that many traders expect bitcoin to recover to the $80,000 level between June and September.
Options are derivative contracts that allow you to bet on the upside or downside of the BTC price, but with built-in protections to ensure that you only lose a small upfront fee, rather than your entire account, if the bet falls short. It’s similar to buying a lottery ticket.
A call option allows you to bet on the price going up, whereas a put option allows you to bet on the price going down. The latter is therefore considered a protective hedge.
Traders usually monitor option distortion – that characteristic gap in pricing between call and put options – to determine which way the market is leaning. More expensive call options compared to put options indicate a bullish bias, while the premium on put options indicates the opposite.
