- The attention to a single-strike price clearly shows that traders are confident about a price boost but also indicates probable high volatility in the near future.
- A high concentration of open interest at a specific strike price, combined with significant trading volume, indicates that traders view that level as important.
- At the same time, currently, the price of BTC is lower than its all-time high of $107, 487 marked on Monday and is trading at $105,010.
The increased popularity of the Bitcoin options market has attracted a lot of attention and made it a good choice for determining market sentiment and predicting volatility. As per some reports, the options flourished an enormous influence over the price volatility of Bitcoin and accounted for most of the volatility in this quarter.
Options data witnessed a notable concentration of open interest (OI) at the $120,000 strike price for contracts at the end of 2024. This specific strike price has also gained the attention of traders, having more than $640 million in OI on Deribit alone.
The attention to a single-strike price
The attention to a single-strike price clearly shows that traders are confident about a price boost but also indicates probable high volatility in the near future. Open interest in strike prices way up the recent spot price of Bitcoin can show that traders wish to bet on exceptional price movements.
At the same time, currently, the price of BTC is lower than its all-time high of $107, 487 marked on Monday and is trading at $105,010. The options delta can offer a transparent view of the probability of such bets.
Delta is a prime options metic, that shows the sensitivity of an option’s value to changes in the underlying asset and can also work as an estimation of the option’s possibility of expiring in the worth.
For the $120,000 strike which will expire on December 27, the delta is positioned at about 0.10, recommending a 10% chance that Bitcoin will attain or surpass this price by the end of this year. As the options are dynamic, they give insight into where traders trust the market could go and how volatile they anticipate it to be.
The dominance of crypto-focused platforms
A high concentration of open interest at a specific strike price, combined with significant trading volume, indicates that traders view that level as important. In this case, the $120,000 strike price stands out as a key point of focus.
This is especially noteworthy because options trading frequently leads to trends in the spot market, with traders using options for hedging, speculation, or to profit from anticipated volatility. A large open interest at a high strike price suggests that the market is bracing for a significant price surge.
The scale of open interest in Deribit highlights the dominance of crypto-focused platforms in the Bitcoin options market. While CME, Binance, and others also provide options trading, Deribit clearly leads, especially when it comes to high-strike call options.
On Deribit, open interest is concentrated not only at the $120,000 strike but also at other important psychological levels like $100,000, $110,000, and $130,000.
This clustering suggests that traders are either hedging or speculating around these crucial price points, likely expecting notable price movements in the final weeks of the year. When paired with low deltas, the data indicates that traders are positioning themselves for low-probability, high-reward scenarios.
