By Gertrude Chávez-Dreyfuss
NEW YORK (Reuters) – Investors in the world’s largest cryptocurrency are anticipating a major move lower after bitcoin failed to reach an all-time high of $100,000, according to a cryptocurrency trading platform citing recent activity. in options.
Bitcoin hit an all-time high of $99,830 on Nov. 22, but has since fallen more than 8% to a one-week low of $91,377.32 on Tuesday.
The best-known cryptocurrency has soared 120% so far this year and around 34% this month with the election of Donald Trump as US president and a host of pro-crypto lawmakers in Congress. Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet” and amass a national reserve of bitcoins.
Nick Forster, founder of decentralized on-chain options protocol Derive with total trading volume of $7.1 billion, said in emailed comments on Tuesday that the so-called call-put bias index for bitcoin’s upcoming expiration on 27 December showed a significant drop of 30% in the last 24 hours, as market participants shifted towards more protective strategies.
Call-put bias, which reflects market sentiment, refers to the difference in implied volatility between calls (options to buy) and puts (options to sell). This bias still shows a preponderance of calls over puts, although it has since decreased.
“This suggests that traders are hedging against potential downside risks,” Forster said, likely in response to BTC’s sharp decline. “However, pullbacks like these are not uncommon in bull markets.”
Investors are awaiting Dec. 27, when $11.8 billion in bitcoin options expire, which could trigger major moves in either direction.
According to Foster, there is a 68% chance that bitcoin will drop 16.03% to $81,493 or 19.9% rise to $115,579 by December 27. However, there is a smaller chance of around 5% that bitcoin will make bigger moves: 29.49%. fall to $68,429 or an increase of 41.83% to $137,645 on the same date.
Derive data also showed an increased 45% chance of bitcoin reaching $100,000, up from 34% last week, with a new 4% chance of breaking $150,000.
Forster also noted stability in bitcoin volatility over the past seven days, with the seven-day in-the-money implied volatility at 63% and the 30-day level at 55%.
“This close alignment suggests that the market anticipates significant moves soon.”
Bitcoin has lost its high position for now, and one of the reasons cited by market participants for the drop was old profit-taking.
Anthony Pompliano, founder and CEO of Professional Capital Management, in his letter to clients on Tuesday, cited _checkonchain.com analysis, which noted that long-term holders have distributed $60 billion in supply in the last 30 days.