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Cryptocurrency

Glass half full: Bitcoin options traders neutral after 28% BTC price dip

April 26, 2021. Summarized by summa-bot.

Compression ratio: 27.2%. 1 min read.

Bitcoin options data shows pro traders are neutrally positioned despite BTC's dip to $47,000 and the subsequent 15% recovery.

As Bitcoin price dropped and then recovered, the more experienced whales and arbitrage desks behind options trading were far from panicking, but their main risk gauge has recently hit a 12-months peak.

However, despite these 'worsening' conditions, these pro traders are neutral both in skew metrics (options pricing) and the put-to-call ratio (risk exposure).

Call options are deemed neutral-to-bullish as they give its buyer the possibility of high leverage with a little upfront investment.

On the other hand, put options provide its buyer a hedge, or protection from negative price swings.

To correctly interpret how professional traders are balancing the risks of unexpected market moves, the 25% delta skew provides a reliable and instant "fear and greed" analysis.

This indicator compares similar call (buy) and put (sell) options side by side and will turn negative when the neutral-to-bearish put options premium is higher than similar-risk call options.

by summa-bot

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