Bitcoin on the rise: Rising prices, call options and bullish analysts' outlook

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WRITTEN BY Abel Stokes 91 views date-icon 2024-05-14 14:27:10

The active number of bitcoin call contracts exceeds the number of put contracts, indicating a bullish market.

Bitcoin's recovery is fuelling interest in out-of-the-money calls with strike prices ranging from $70,000 to $100,000.

Analysts note that the most likely path for bitcoin is in an upward direction.

The rising value of bitcoin is causing options traders to rethink the possibility of reaching the $100,000 level this year.

Bitcoin prices rose more than 12% to $63,470 following Federal Reserve Chairman Jerome Powell's announcement to maintain current policy, as confirmed by CoinDesk data. The increase has led to increased demand for bitcoin call options on Deribit, the largest cryptocurrency exchange, and on over-the-counter platforms.

"We are seeing a bullish trend in volatility and rates after Friday's spike. Call options on bitcoin with strike prices of $75,000 and $100,000 are back in demand," QCP Capital said in a report.

What is OCP Capital

Paradigm's out-of-the-money open interest also indicates increased interest in out-of-the-money (OTM) options, which have strike prices significantly higher than bitcoin's current value.

Deribit data shows that traders have invested more than $688 million in call options with strike prices of $100,000 for various maturities. This is the highest open interest among all options on the exchange.

At the time of writing, Deribit had more than 150,000 active call option contracts totalling $9.5 billion, twice the interest in put options, indicating a bullish trend in the market.

Analysts view BTC favourably

Fundamental and technical analysts are once again coming to a consensus that bitcoin has a strong chance of growth.

10X Research notes that bitcoin continues to receive support from the US election cycle and budget deficit spending. They have refined their forecasts, stating that the market could trade bullishly above the $62,000 level.

Siwssblock Insights predicts that the dollars index (DXY) will remain on the defensive if Powell's stance is not challenged. A decline in the DXY is usually favourable for risk assets, including cryptocurrencies. Since Wednesday's Federal Reserve meeting, the DXY is down 1.2%.

Elliott Wave analysis by John Glover, chief investment officer at Ledn, suggests bitcoin could reach the $92,000 level.

Elliott Theory, introduced by Ralph Nelson Elliott, suggests that asset price movements can be predicted by observing repeating wave patterns. Trends develop in five waves, of which 1, 3 and 5 are impulsive and 2 and 4 are temporary corrections.

Conclusion

In general, bitcoin shows positive dynamics, and the bullish trend may continue in the near future.

It is worth noting that the cryptocurrency market remains volatile and any forecasts are probabilistic.

Q&A

Q: What factors support the bullish trend in the bitcoin market, according to analysts at 10X Research?
A: Factors supporting a bullish trend in the bitcoin market include support from the US election cycle and continued budget deficit spending.

Q: What predictions does 10X Research's analyst firm make regarding bitcoin's trading range?
A: 10X Research expects that the market could trade bullishly above the $62,000 level.

Q: What prediction does Swissblock Insights make regarding the dollars index (DXY) and its impact on the cryptocurrency market?
A: Swissblock Insights predicts that the dollars index (DXY) will remain on the defensive, which is favourable for risk assets, including cryptocurrencies, if Powell's position is not challenged.

Q: What features of Elliott wave analysis point to a possible rise in bitcoin?
A: John Glover's Elliott Wave Analysis suggests that bitcoin could reach the $92,000 level.

Q: What is Elliott theory, and how does it relate to predicting price movements in the market?
A: Elliott Theory, introduced by Ralph Nelson Elliott, suggests that asset price movements can be predicted by observing repeating wave patterns. It is related to predicting price movements in the market as trends develop in five waves, which allows us to analyse current and future price movements.

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