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Analysis of Bitcoin Options Market Amid Price Volatility
Bitcoin’s price is currently hovering around $63,000, experiencing a slight decline over the past 24 hours. During this period of price volatility, the options market has provided valuable insights into the shifting investor sentiment leading up to the expiration on April 26.
Reduction in Positive Gamma Exposure
One significant development in the options market has been the reduction in positive gamma exposure as Bitcoin declined through the heavily traded $65,000 call strike. Imran Lakha, a seasoned options trader with 20 years of experience, highlighted this shift in sentiment, stating that “short gamma reduced on the way down as we went through the big long strike at 65k suggesting volume has been smashed lower, calls are getting dumped.”
Options Open Interest Data
The options open interest data provided by Deribit reveals a max pain price of $61,000, which could potentially serve as a short-term support level for Bitcoin. While there is significant open interest in calls above the current spot price, the lack of put open interest below $60,000 indicates a lack of downside protection. This price level has been identified by CryptoSlate as a crucial support threshold to monitor.
Put/Call Ratio and Investor Sentiment
The put/call ratio of 0.68 reflects a modest bias towards calls, signaling a preference for bullish positions. However, this bias has decreased notably due to likely profit-taking on downside hedges. The options market data suggests a cooling of bullish sentiment as Bitcoin pulled back from recent highs. Nevertheless, the remaining upside option holdings could still influence short-term price action.
In conclusion, with the max pain level identified as a potential support zone, investors are advised to closely monitor the options market data and its impact on Bitcoin’s price trajectory amidst ongoing volatility.
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