coindesk.com
Bitcoin’s $BTC$64,172.54 booming options market has undergone a notable shift in positioning that could slow the largest cryptocurrency’s ascent above $70,000.
That change is tied to open interest in options, a metric that gauges the dollar value locked in the number of call — that is, bullish — and put, or bearish, contracts at various strike levels. Call options at $70,000 are currently the most popular, with open interest of $1.63 billion, according to data source Metrics. The option is a bet that $BTC’s price will rise above that level before the contract expires.
Here comes the most important part, though: The $70,000 strike has replaced the $80,000 call as the most popular play.
For the past six months, $80,000 has been the heaviest call, carrying similar levels of open interest, while the $60,000 put was the most sought-after downside bet. Analysts consistently referred to bitcoin’s $60,000-$80,000 price range over that period.
In other words, the ceiling has likely now shifted lower to $70,000 while the $60,000 put still remains the most popular play, or a possible floor for the bitcoin price.
The implication does not stop there. According to Imran Lakha, founder of Options Insights, dealers hold a "net long gamma exposure" above $70,000. It means the dealers, who strive to maintain market-neutral exposure while making money from the bid-ask spread, would short or sell into strength above 70,000 to stay neutral or hedged.
"That hedging acts like a brake, capping how fast $BTC can run once it gets up there," Lakha said, adding that ether (ETH) isn't as exposed to dealer gamma dynamics and can rip much faster.
Bitcoin was recently changung hands near $64,100, down nearly 1% since midnight UTC. Other major cryptocurrencies, including ether, $XRP ($XRP) and solana (SOL) nursed similar losses, while Nasdaq 100 index futures fell 0.5%.
"As always, there is a risk of a sudden sell-off amid financial market shocks, which could send $BTC or global stock indices into a tailspin, but waiting for such moments is a thankless task,” said Alex Kuptsikevich, the chief market analyst at FxPro. “In such conditions, buying in a quiet market at less than half of peak levels looks like a perfectly reasonable tactic for the coming days or weeks.”
Stay alert!
Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead."