Bitcoin spot and options market review to determine short term trajectory

The Bitcoin market has been inundated with strong bullish news lately. The approved ETF as well as billionaires and politicians are optimistic about BTC, which is having a really good impact.

BTC price 4-hour chart | Source: Tradingview

Meanwhile, the crypto king’s sideways movement caused trouble last week. As the spot market retreats, attention is turning to the BTC futures and options markets.

The level of importance is retained

Despite the sideways trend, it’s worth noting over the past week that the Bitcoin futures ETF is making things easier. Since ETFs have to buy CME futures, this leads to an increased number of open interest (OI) contracts.

The futures spread is higher than spot BTC, and it is noteworthy that the ask / bid spread is much larger. However, the total open interest and option volume of BTC options has steadily declined over the past few days.

Open interest on Deribit dropped from $ 13 billion to $ 11 billion, while options volume dropped from over $ 1 billion to $ 423 million, nearly 50% of the volume in less than a day.

Total open interest in BTC options | The source: Crookedness

However, BTC is still holding the $ 60,000 level, which is a good sign. The reason for the drop in the OI could be the monthly expiration event on October 29th. With BTC trading over $ 58,000 that day, it made over $ 400 million in profit for the bulls.

The script is confusing

Bitcoin price is more or less consolidating. It seems that analysts have mixed views on the short-term trend, including two that are currently standing out in the market, bearish and bullish:

1. What happens is a process of quick balancing and prep work before the new ATH moves forward.

2. The recent consolidation could be the start of a broader correction that will bring BTC into the $ 45,000 to $ 50,000 range.

The argument for the first hypothesis is that the HODLer still has no sales interest while the sales volume and profit-taking appear to be very low.

It is noteworthy that the old coin volume, although increasing, is still at historic lows. Most importantly, the accumulation trend that started in May is still continuing. At the macro level, the larger market is therefore bullish.

However, there is also reason to oppose the above trend as more than 6,000 put contracts are placed at the price of 50,000.

Source: Skew

In fact, there appears to be very little activity and sell contracts are still more than 3: 2 buy contracts in the CME bitcoin options market.

The source: Ecoinometry

Above all, however, a trend indicates a short-term correction that the BTC inflows into the spot (MA7) are increasing.

In the past, the price has mainly faced corrections as the BTC inflows into the spot (MA7) increased. “Short-term” corrections may take time to process this amount.

The source: KryptoQuant

All in all, with the spot market being quieter and the options market quite complex, a monthly and weekly closing price above $ 61,000 could do something to help set the direction for BTC in the near future.

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