Bitcoin Options Market Prepares for ETF Decision
As the deadline for a decision on spot Bitcoin ETF applications approaches, traders in the BTC options market are taking steps to hedge their bets. Open interest for put options expiring on January 12 has surged, indicating that market participants are preparing for potential losses if the US Securities and Exchange Commission (SEC) delivers a negative verdict on these index funds. The surge in open interest has resulted in a higher put-to-call ratio for these specific options compared to contracts with later expiration dates.
Market Readies For Bitcoin ETF Verdict
The surge in open interest for put options with January 12 expiration dates reflects a growing need for protection in case of an unfavorable ruling. The most prominent strike prices for these put contracts are $44,000, $42,000, and $40,000, suggesting that holders may exercise their options to minimize losses if the SEC decision triggers a negative market reaction. The higher put-call ratio indicates a more cautious approach among traders.
BTC’s Price Resistance And Potential Dip
Bitcoin has experienced a significant rally this year due to expectations of ETF approval. However, the surge in demand for these anticipated ETFs may already be factored into the token’s price, potentially leading to a “sell the news” scenario in January. QCP Capital predicts resistance levels at $45,000 to $48,500 and a possible retracement to $36,000 before the uptrend resumes.
Hot Take: Potential Impact of ETF Decision
The surge in hedging activity in the BTC options market suggests that traders are bracing themselves for a potential negative decision on Bitcoin ETFs. While Bitcoin has seen significant growth this year, driven by optimism surrounding ETF approval, there is concern that this expectation may already be priced in. If the SEC delivers a negative verdict, it could trigger a sell-off and a temporary dip in Bitcoin’s price. However, the long-term outlook for Bitcoin remains positive, especially with the upcoming halving event predicted to push the cryptocurrency to new all-time highs in the coming year.
By
By
By
By
By