Evaluation of Bitcoin’s spot and options markets with regard to its short-term price development

A bigger bullish narrative has dominated the Bitcoin markets lately. The ETF’s approval, as well as the optimistic stance of billionaires and politicians on BTC, has really paid off.

Meanwhile, the sideways movement of the king coin over the past week has been daunting. As the spot market took a back seat, attention shifted to BTC options and the futures market.

Maintain important levels

Despite the sideways movement, it was noticed last week that Bitcoin futures ETFs made things easier. Since the ETFs have to buy futures contracts on the CME, this led to an increase in open interest.

This suggests that the futures have a larger premium over the spot BTC and significantly larger spreads. However, the total BTC options open interest (OI) and option volume have seen a steady decline in the past few days.

The Deribit OI declined from $ 13 billion to $ 11 billion, while the option volume fell from over $ 1 billion to $ 423 million; a volume loss of almost 50% in less than a day.

Source: Skew

Nonetheless, BTC maintained the $ 60,000 level, which was a good sign for holding the price. One reason for the decline in the OI could be the monthly expiration on October 29th. With BTC above $ 58,000 on the day, it resulted in more than $ 400 million in profit for bulls.

Amazing scenario

Bitcoin price was more or less consolidated. It seemed like analysts had mixed views on the coin’s near-term price action. There were two other prominent opinions circling the market, one bearish and the other bullish:

  1. What happens is a quick equilibrium process and preparation for the urge for new all-time highs.
  2. The recent consolidation could be the start of a wider correction that could push BTC into the $ 45,000 to $ 50,000 range.

Arguments in support of the first hypothesis were that HODLers were still not interested in selling while selling and profit taking seemed minimal.

It is noteworthy that the old coin volume increased, but was still at a historically low level. Above all, however, an accumulation trend that began in May persisted. At the macro level, the larger market in BTC was bullish.

That said, there has also been enough counterpoints to the above trend, in particular there are more than 6,000 puts on the $ 50,000 BTC level.

Source: Skew

In fact, there appeared to be very little activity as the puts still dominate calls three or two in the CME bitcoin options market.

Source: ecoinometry

Most importantly, however, a trend indicated a short-term correction that BTC The inflow of the cash exchanges (MA7) now appeared to be increasing.

In the past, too, the BTC price has mostly faced corrections when the BTC spot exchange inflow (MA7) increased. We could see a “short-term” correction until some of the spot has flown into the exchanges and dealt with.

Source: CryptoQuant

All in all, BTC’s monthly and weekly closing with a quieter spot market and a more confusing options market could determine the price flow ahead.

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