Bitcoin heading towards $34,000? Heavy Buyer Buy Signals Yes

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Image by: Andrew Ling – Unsplash

Bitcoin finally sees green after trading at a loss for the past two weeks. The cryptocurrency continues to trade in a tight range, but activity in the options market could hint at a potential run to new highs.

As of this writing, Bitcoin (BTC) is trading at $27,900 with a profit of 2.5% over the past 24 hours. Over the past week, the cryptocurrency has seen profits double by registering a performance of 4.4%. The other top 10 cryptocurrencies by market capitalization are seeing similar momentum.

BTC price is recording small profits on the daily chart. Source: BTCUSDT TradingviewOptions Bitcoin Hint at a new rally?

Data from crypto options trading platform Deribit points to lower implied volatility (IV). This metric measures the anticipation of future price movements by market participants.

IV has been trading sideways over the past month, trending lower. Deribit claims that the growing uncertainty in the crypto market and macro landscape is fueling the current momentum on this metric, resulting in slow price action for BTC and crypto.

As the Bitcoin price rallies, option buyers have sold their contracts. When the opposite happens and BTC sees a rise, option sellers drop their contracts.

This momentum put constant selling pressure on the IV and helped suppress the BTC spot sector. However, the upcoming US debt ceiling, the date when that country could default on its domestic financial commitments, could change the status quo.

The narrative around this event hints at further appreciation for BTC and risky assets. Today, stocks and crypto rallied as major political factions in the North American country reached a tentative agreement that could avert a crisis in the financial world.

Over the weekend and in today’s development, Deribit noted that BTC options maturity has turned profitable. The exchange also saw aggressive buy calls as the landscape signals gains for the cryptocurrency and prices return north of $27,000.

This big player bought calls (buy orders), betting that BTC could hit $34,000 somewhere in July/August 2023, as shown in the chart below.

BTC’s peak is asking for $34,000 following a tentative debt suspension agreement. Source: Debit via Twitter

Deribit said in a market update:

ATM-28k Calls Under 7 Days + July 31k Calls Bravely Bought Before Long Weekend Theta Turned Profitable as Debt Ceiling Talks Progressed and Big DSOB Buyer of July + August Calls 34k was accumulating aggressively at higher prices just before the Spot cut at 27.3k and now 28k

Cover image from Unsplash, chart from Tradingview

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