Headers and Key Points:
- Institutional Confidence Restored: Upbeat U.S. inflation data restores institutional faith in Bitcoin’s long-term bullish case.
- Near-Term Concerns Persist: Despite positive data, concerns linger regarding a potential near-term price pullback.
- Options Trading Analysis: CF Benchmarks’ analysis of CME options trading data indicates a cautious sentiment among investors.
- Implied Volatility Trends: Implied volatility for short-dated out-of-the-money (OTM) put options remains higher than OTM calls, suggesting investor wariness.
- Put Options and Hedging: Put options provide insurance against price drops and are favored by investors seeking to hedge against downturns.
- Volatility as Uncertainty Indicator: Implied volatility serves as an estimate of future asset volatility, increasing with rising options demand.
- Volatility Surface Analysis: Post-U.S. CPI release, bias is for OTM puts expiring in 20 to 40 days, while longer-dated options skew towards calls.
- Institutional Participation: Relatively flat implied volatility levels for longer-dated options suggest increased institutional involvement.
- Deribit Options Market: Long-term bullish sentiment observed in options trading on Deribit, with higher notional open interest compared to CME.
- Bitcoin Price and Momentum: Bitcoin’s current price at $65,550 represents a weekly gain of 6.6%, reflecting positive momentum.
- Cautious Sentiment: Despite gains, options market indicates cautious sentiment regarding potential short-term price movements.
