• Bitcoin options market turns negative on short-term BTC price outlook, but longer-term bullish bets remain.
• 25% Delta Skew of bitcoin options expiring in seven days fell to around -2, its lowest level since March 14th.
• Despite the 7-day 25% delta skew weakening, the 180-day 25% delta skew remains at elevated levels of above 3.
Bitcoin Options Market Turns Bearish on Short-Term BTC Price Outlook
Investors have turned their most bearish on Bitcoin’s short-term price outlook in more than one month, according to options market data presented by crypto data analytics website The Block.The 25% delta skew of Bitcoin options expiring in seven days fell to around -2 on Friday, its lowest level since the 14th of March. This means that bearish Bitcoin put options expiring in seven days are trading at a premium versus equivalent bullish call options, suggesting investors disproportionately demand the former as BTC falls into the low $28,000s. With Bitcoin below some key short-term support levels risks of an extended correction to support in the $26,500 and $25,200-400 zones have risen.
Longer Term Bullish Bets Remain Confident
Despite the 7-day 25% delta skew weakening to its lowest level in over a month, the 180-day 25% delta skew remains at fairly elevated levels of above 3.This suggests that bullish Bitcoin call options expiring in 180 days are trading at a premium versus equivalent bearish put options showing investors’ confidence towards BTC’s longer term outlook. Reasons for this include uncertainty about how many more times US Federal Reserve will lift interest rates and when it will start cutting them; favorable changes to financial conditions unlikely to return as a major headwind to crypto markets; and other technical developments such as BTC’s bounce from its 200DMA and Realised Cap hitting new all time highs recently.
Uncertainty Remains About Fed Rate Action
While significant uncertainty remains about how many more times the US Federal Reserve will lift interest rates and when it will start cutting them, one thing seems certain – the end of the Fed’s tightening cycle looks close as US inflation and economic growth decelerate.
Tailwinds Expected From Technical Developments
Bitcoin is likely to continue deriving tailwinds from key recent technical developments including 1) Bitcoin’s spectacular bounce from its 200DMA and Realised Cap hitting new all time highs recently .
While uncertainties remain about further rate action from US Federal Reserve ,investors remain confident about Bitcoins long term prospects due to other technical developments like 200 DMA bounce off etc