{"id":27760,"date":"2022-05-24T02:06:43","date_gmt":"2022-05-24T06:06:43","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=27760"},"modified":"2024-04-12T03:41:13","modified_gmt":"2024-04-12T07:41:13","slug":"bitcoin-option-market-shows-major-downside-risks-over-the-next-few-months","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/bitcoin-option-market-shows-major-downside-risks-over-the-next-few-months\/","title":{"rendered":"Bitcoin Options Market Shows Major Downside Risks Over The Next Few Months"},"content":{"rendered":"\n
Following the steady trade of Bitcoin<\/a> at a low price in recent times, Glassnode has predicted a further decline in the price for the next 3 to 6 months.<\/h5>\n\n\n\n
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\"Bitcoin<\/figure>\n<\/figure>\n\n\n\n

Bitcoin (BTC<\/a>), the world's largest cryptocurrency, is still under heavy selling pressure. On Monday, May 23, the Bitcoin price fell 3%, falling below $30,000<\/a> despite a rise in the US equity market.<\/p>\n\n\n\n

Bitcoin has been trading in the $28,500-$31,500 range for some time now. According to Glassnode data, the Bitcoin market has been trading lower for eight weeks in a row, making it the longest “continuous string of red weekly candles in history.”<\/p>\n\n\n\n

Furthermore, a look at the Bitcoin derivatives market indicates the possibility of further decline, at least in the next three to six months. Glassnode, and on-chain data provider, explains in its latest report that the Bitcoin options market continues to price in near-term uncertainty.<\/p>\n\n\n\n

The implied volatility of Bitcoin option increased significantly during the market sell-off last week. Glassnode elaborates:<\/p>\n\n\n\n

“Short-dated at-the-money options saw IV more than double, from 50% to 110%, whilst 6-month dated option IV jumped to 75%. This is a break higher from what has been a long period of very low implied IV levels.”<\/p>\n\n\n\n

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\"Bitcoin
Image credit: Glassnode<\/figcaption><\/figure>\n<\/figure>\n\n\n\n

Bitcoin Options Have Higher Preference<\/h2>\n\n\n\n

With a strong bearish sentiment, Bitcoin put option have a strong preference for the end of Q2 2022. Over the last two weeks, the Bitcoin put\/call ratio for open interest has risen from 50% to 70%. It indicates that the market is preparing to hedge additional downside risks.<\/p>\n\n\n\n

By the end of the second quarter, there will be strong put Bitcoin options with strike prices of $25k, $20k, and $15k. At the same time, the number of open call options is very low. As a result, by the middle of this year, investors have a strong preference for hedging risks and speculating on further price declines.<\/p>\n\n\n\n

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Image credit: Glassnode<\/figcaption><\/figure>\n<\/figure>\n\n\n\n

Long-term, or by the end of the year, the options interest setup for Bitcoin is noticeably positive. Glassnode explains\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>:<\/p>\n\n\n\n

“There is a clear preference for call options, with a concentration around strike prices of $70k to $100k. Furthermore, the dominant put option strike prices are at $25k and $30k, which are at higher price levels than the mid-year.”<\/p>\n\n\n\n

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\"Bitcoin
Image credit: Glassnode<\/figcaption><\/figure>\n<\/figure>\n","protected":false},"excerpt":{"rendered":"

Following the steady trade of Bitcoin at a low price in recent times, Glassnode has predicted a further decline in the price for the next 3 to 6 months. Bitcoin (BTC), the world’s largest cryptocurrency, is still under heavy selling pressure. On Monday, May 23, the Bitcoin price fell 3%, falling below $30,000 despite a […]<\/p>\n","protected":false},"author":33,"featured_media":27770,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[83,76],"tags":[152,484],"class_list":["post-27760","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news","category-bitcoin-price","tag-bitcoin","tag-bitcoin-price"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2022\/05\/bitcoin-price-crash-china-1.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/27760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=27760"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/27760\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/27770"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=27760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=27760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=27760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}