Bitcoin options traders chase $110K, but roadblocks lie ahead
Here's why Options analysts believe that Bitcoin's price range could extend in the short-term.
- Options analysts downplayed Bitcoin’s breakout prospects in the short term.
- U.S. spot BTC ETFs products saw +$580M in outflows in the past week.
Bitcoin [BTC] Option traders have increased bets on BTC rallying to $110K by the end of March, but analysts have cautioned of an extended sideway structure and possible losses.
According to the Options analytics platform Amberdata, traders had doubled down on $110K March calls (bullish bets) in February. However, the firm projected that the bets could face losses.
“Looking at the month-to-date flows for on-screen traders… the buying of March $110k calls has been the most active trade. I can’t help but think volatility (Vol) buyers are going to get burned here.”
Amberdata’s Greg Magadini pinned his sideway projection to bearish meme-coins headlines and BTC’s lukewarm reaction to recent bullish updates like Abu Dhabi’s massive bid on BlackRock’s IBIT.
“With bearish memecoin market drag (a source of bearish headlines) such as the $Libra drop, pump-fun mania and growing supply of alts and I see this market in stand-still. Together this reinforces my “sideways” market, lower volatility market thesis.”
BTC range-bound
QCP Capital, one of the world’s leading crypto options desks, also reinforced the extended price range outlook. Part of the daily market update read,
“The market remains hesitant to take on decay even at low vol levels, reminiscent of BTC’s range-bound price action in Q2-Q3 last year. Instead, flows have primarily focused on near-dated volatility selling and range trading rather than positioning for a major breakout.”
A similar warning for BTC bulls was flagged by the BTC dominance. According to crypto analyst Mathew Hyland, there was a bearish divergence in the weekly chart, suggesting that BTC’s market share could drop soon.
That said, BTC was valued at $95K at press time and has been below $100K for nearly two weeks. The risk-off sentiment has also been observed across U.S. spot ETF products.
In the past week, the products saw combined outflows of $585.65M. The muted demand from the ETF products could cap BTC’s recovery efforts.
