{"id":36589,"date":"2024-02-29T23:52:39","date_gmt":"2024-03-01T03:52:39","guid":{"rendered":"http:\/\/cryptocornercafe.com\/cafe\/?p=36589"},"modified":"2024-02-29T23:52:39","modified_gmt":"2024-03-01T03:52:39","slug":"fomo-fuels-bitcoins-35-jump-options-flow-hints-at-bigger-upswing","status":"publish","type":"post","link":"http:\/\/cryptocornercafe.com\/cafe\/2024\/02\/29\/fomo-fuels-bitcoins-35-jump-options-flow-hints-at-bigger-upswing\/","title":{"rendered":"FOMO Fuels Bitcoin\u2019s 35% Jump, Options Flow Hints At Bigger Upswing"},"content":{"rendered":"

The price of Bitcoin seems on the brink of blasting past its all-time high (ATH) at the high area of its current levels. The cryptocurrency has been on a bull run due to the launch of spot Bitcoin Exchange Traded Funds (ETF), which officially onboarded institutions to the nascent sector. <\/strong><\/p>\n

As of this writing, Bitcoin (BTC) trades at around $62,900 with a 3% profit in the last 24 hours. In the previous week, the cryptocurrency recorded a critical 22% profit. It stood as one of the three top gainers in the top 10 by market cap, only surpassed by Solana (25%) and Dogecoin (57%) in the same period.<\/p>\n

Bitcoin-Based Derivatives Hint At Further Gains<\/h2>\n

Data from the derivatives platform Deribit indicates<\/a> a spike in long positions by Options operators. Since early February, these traders have accumulated important call (buy) contracts with a strike price above $65,000.<\/p>\n

At first, as the report indicates, the increase in bullish positions was thought to be part of a Bitcoin \u201cHalving\u201d strategy. However, the BTC ETF Flows seem to be the key component behind the rally.<\/p>\n

As cryptocurrency entered the $60,000 area, several operators rushed to accumulate call contracts, leading to a Fear Of Missing Out (FOMO) rally to its current levels. The chart below shows that the FOMO buying began when BTC breached the $57,000 level.<\/p>\n

The spike in trading activity during yesterday\u2019s session led to a significant jump in Implied Volatility (IV). Overleveraged positions further propelled the metric, Deribit stated:<\/p>\n

The 62k to 64k surge was so quick, and with high leverage across the whole system, that when sales hit the market a cascade sent BTC down to 59k in 15mins, and some Alts (also massively leveraged) dropped 50% on some exchanges before promptly bouncing as BTC jumped to 61.5k.<\/p>\n

As the market continues to experience sudden moves due to the high IV, there is little change in the market structure in the derivatives sector. In other words, Deribit still records a lot of bullish positions for the coming months, which suggests optimistic conviction by these players.<\/p>\n

BTC Price On The Short Timeframe<\/h2>\n

Despite the bull run, the Bitcoin price could dip as euphoria takes over the market. According to economist Alex Kr\u00fceger, the spike in trading volume across the derivatives sector indicates<\/a> the formation of a \u201clocal top.\u201d<\/p>\n

The analyst believes that retail has returned to the market driven by FOMO, which often hints at short-term predicaments for long traders. Kr\u00fcger predicted further gains into the $70,000 area via his official X account and then a drop into the $55,000 area.<\/p>\n

The analyst stated:<\/p>\n

ATH are inches away. That\u2019s price discovery territory. Thus very easy for things to get even crazier. This is just not where one opens new longs. Too easy to get a quick flush out of nowhere. Ideally we see funding cool down and price consolidate below ATH then break out.<\/p>\n

Cover image from Dall-E, Chart from Tradingview<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

The price of Bitcoin seems on the brink of blasting past its all-time high (ATH) at the high area of its current levels. The cryptocurrency has been on a bull run due to the launch of spot Bitcoin Exchange Traded Funds (ETF), which officially onboarded institutions to the nascent sector. <\/strong><\/p>\n

As of this writing, Bitcoin (BTC) trades at around $62,900 with a 3% profit in the last 24 hours. In the previous week, the cryptocurrency recorded a critical 22% profit. It stood as one of the three top gainers in the top 10 by market cap, only surpassed by Solana (25%) and Dogecoin (57%) in the same period.<\/p>\n

Bitcoin-Based Derivatives Hint At Further Gains<\/h2>\n

Data from the derivatives platform Deribit indicates<\/a> a spike in long positions by Options operators. Since early February, these traders have accumulated important call (buy) contracts with a strike price above $65,000.<\/p>\n

At first, as the report indicates, the increase in bullish positions was thought to be part of a Bitcoin \u201cHalving\u201d strategy. However, the BTC ETF Flows seem to be the key component behind the rally.<\/p>\n

As cryptocurrency entered the $60,000 area, several operators rushed to accumulate call contracts, leading to a Fear Of Missing Out (FOMO) rally to its current levels. The chart below shows that the FOMO buying began when BTC breached the $57,000 level.<\/p>\n

The spike in trading activity during yesterday\u2019s session led to a significant jump in Implied Volatility (IV). Overleveraged positions further propelled the metric, Deribit stated:<\/p>\n

The 62k to 64k surge was so quick, and with high leverage across the whole system, that when sales hit the market a cascade sent BTC down to 59k in 15mins, and some Alts (also massively leveraged) dropped 50% on some exchanges before promptly bouncing as BTC jumped to 61.5k.<\/p>\n

As the market continues to experience sudden moves due to the high IV, there is little change in the market structure in the derivatives sector. In other words, Deribit still records a lot of bullish positions for the coming months, which suggests optimistic conviction by these players.<\/p>\n

BTC Price On The Short Timeframe<\/h2>\n

Despite the bull run, the Bitcoin price could dip as euphoria takes over the market. According to economist Alex Kr\u00fceger, the spike in trading volume across the derivatives sector indicates<\/a> the formation of a \u201clocal top.\u201d<\/p>\n

The analyst believes that retail has returned to the market driven by FOMO, which often hints at short-term predicaments for long traders. Kr\u00fcger predicted further gains into the $70,000 area via his official X account and then a drop into the $55,000 area.<\/p>\n

The analyst stated:<\/p>\n

ATH are inches away. That\u2019s price discovery territory. Thus very easy for things to get even crazier. This is just not where one opens new longs. Too easy to get a quick flush out of nowhere. Ideally we see funding cool down and price consolidate below ATH then break out.<\/p>\n

Cover image from Dall-E, Chart from Tradingview<\/p>\n

<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-36589","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/36589","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=36589"}],"version-history":[{"count":1,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/36589\/revisions"}],"predecessor-version":[{"id":36598,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/36589\/revisions\/36598"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=36589"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=36589"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=36589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}