Bitcoin Bulls Bet on BTC Reaching $36,000 by Christmas

Key Takeaways

  • Options traders bought 1,444 call options on Sept. 13 at strike prices above $28,000
  • The low volatility support to BTC price above $10,000 could soon exhaust the bears and lead bullish consolidation.
  • Upcoming U.S. elections and high volatility in stock markets might be motivating investors to decrease their spot exposures.

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Bitcoin options traders have been aggressively buying call options at exorbitantly high prices. Leading crypto derivatives exchange Deribit saw 752, 462, and 230 contracts bought on Sept. 13 at strike prices of $36,000, $32,000, and $28,000, respectively. Each contract allows a buyer to purchase one Bitcoin at the strike price at the time of expiration. 

The flood of purchases thus indicates that many traders expect Bitcoin to be at or above these three prices before the end of the year. 

BTC Options
Bitcoin Options Open Interest Daily Change Source: Skew

Though traders are willing to bet on BTC prices skyrocketing to new highs, the current macro environment presents many uncertainties. 

Bitcoin Options Upside Risk 

The aggressive accumulation of call options at strike prices of $24,000 and $36,000 is indicative of “tail risk management.” Tail events are rare events with drastic changes in price. 

The chart below shows that the most number of bids are around the mean at the $10,000 mark. However, there is a significant tail to the right, which extends from the strike price of $20,000 to $36,000.  

SIMETRI small cap big gain
Bitcoin Options Chart
Source: Twitter

Extensive call options buying at such extreme prices are a reflection of the potential “up-jumps” in prices. In the case of an upswing in BTC price, these call options will become more expensive, profiting higher than the actual increase in the spot price.

Probability of BTC Options
Bitcoin Options Market Probabilities Source: Skew

Nevertheless, the market only places a 6% chance that BTC will break above its previous all-time high at $20,000 by Dec. 20. This figure drops off much further after $28,000. By limiting the…

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