Recent data from analytics firm Skew reveals that Bitcoin options traders have placed significant bullish bets targeting price levels far above the previous all-time high. The most active contracts for December 2020 expiry include strike prices of $28,000, $32,000, and $36,000, all well above the $19,600 peak reached in December 2017.
Call Options Dominate December Expiry
On September 14, Skew tweeted: “[December 2020] $28k, $32k, [and] $36k calls among the most active bitcoin options contracts yesterday.” The open positions were opened on the crypto derivatives platform Deribit, following the expiration of $570 million in notional Bitcoin options on August 28. Specifically, there were 752 open contracts for the $36k strike, 462 for $32k, and 230 for $28k. Additionally, some $9,000 and $9,750 calls were set for the end of September. One observer commented, “Without opining the possibilities to this, it will be entertaining to revisit at the end of the [fourth] quarter.”
Deribit Maintains Market Leadership
In its August 2020 newsletter, Deribit stated that despite growing competition, it still holds approximately 79% of total Bitcoin options open interest. Two days prior to the weekend, Skew shared a chart showing total Bitcoin options open interest by expiry, noting that traders were “gearing up towards a pretty chunky bitcoin options expiry at the end of the month,” with $750 million in open interest already outstanding. This concentration on Deribit underscores the platform’s critical role in price discovery and sentiment measurement.
Market Sentiment and Technical Analysis
Research firm Ecoinometrics, analyzing CME Bitcoin options, stated that it does not believe market sentiment has turned bearish. “From a technical perspective, Bitcoin is flipping the former resistance level at $10,000 into support. For the past seven days, $10,000 is holding strong,” the firm noted. On CME, calls dominate with five calls for every two puts. Ecoinometrics added: “It is pretty clear option traders are buying puts on the front month to protect themselves or benefit from a short-term drop. But for the long term, the bullish sentiment is pretty much unchanged.”
Macro Context and Spot Market Rally
On Monday, Bitcoin spot markets surged more than 4% during afternoon trading, approaching the $11,000 zone. The move occurred against a backdrop of uncertainties including the upcoming Federal Reserve meeting on Tuesday and Wednesday, the U.S. election, and dollar volatility. The alignment of aggressive call buying in the options market with spot price strength suggests that a segment of traders expects significant upside by year-end. While a $36,000 price is more than 80% above current levels, the open interest data provides a clear signal of conviction among some professional investors.