Bitcoin's put-call options ratio a bullish indicator for the market, says analyst

Quick Take

  • Friday’s week, month and quarter-end bitcoin options expiry date revealed a put-call ratio that was a bullish indicator for the market, an analyst said. 
Approximately $4.5 billion worth of options expired on Friday on the Deribit derivatives exchange. According to Deribit Chief Commercial Officer Luuk Strijers today's bitcoin put-call options ratio was a bullish indicator for the digital asset.

"The put-call ratio was bullish as there were more calls outstanding than puts," Strijers told The Block. A put-call options ratio below one indicates that the call volume exceeds the put volume, signifying bullish sentiment in the market. According to data from The Block dashboard, today's put-call ratio on Deribit is 0.49.


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Strijers added that an even more important metric was Friday's elevated skew for call prices compared to puts. "This means calls are relatively more expensive and driven by increased demand, another bullish signal. Finally, we see the basis, difference between futures and spot, increasing as well. This is a signal traders expect the upcoming expiries to settle at higher levels versus spot today, another bullish signal," Strijers added.

Options are derivative contracts that give a trader the right but not the obligation to buy or sell the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy and a put offers the right to sell. It is assumed that a trader who buys call options is implicitly bullish on the market, while a put buyer is bearish.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].


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