Bitcoin Options Open Interest Nears All Time High – But Rise in Puts Could Presage Drop

While open positions in bitcoin (BTC) options have risen to near record-high levels, it's not necessarily a good thing for those hoping for the rally in the cryptocurrency to continue.

The total number of outstanding BTC options contracts – or open interest (OI) – increased to $2.10 billion Thursday – just shy of the all-time high of $2.11 billion in late July, per data from Skew.

On its own, high open interest can indicate existing trends are likely to be sustained – suggesting BTC's recent rally from $10,650 could continue.
But the number of bearish puts relative to bullish calls has recovered from -10.3% to -3% in the past four days. As the graph below shows – traders are offloading much of their call options onto the market.

Bitcoin options' positioning since 00:00 UTC

This suggests bullish speculation is beginning to ease – a sign of investors anticipating consolidation or price drop
Indeed, BTC has already pulled back more than 5% from the 13-month high above $12,400 it reached on Monday.
Unless buying action comes quick, downwards momentum could push prices down to $11,000, QCP noted earlier this week.

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Omkar Godbole

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