As Bitcoin prices approach their historical highs set earlier this year, options traders are targeting aggressive upside potential. Some investors are betting that Bitcoin could surpass $300,000 by late June. On the crypto options exchange Deribit, call options expiring on June 27 with a strike price of $300,000 have become the second most popular open interest, following contracts with a $110,000 strike price. This expiration date sees the highest activity in overall open positions.
Jeffrey Howard, head of North America at crypto brokerage Nonco, noted that Bitcoin options are showing bullish signals across various maturities. Far-out call options are priced significantly higher than equivalent puts, indicating a generally optimistic market outlook. As of Tuesday, Bitcoin's price hovered around $106,000, just 3% shy of its all-time high of $109,200 recorded on January 20.
Recent shifts in trader sentiment are partly attributed to easing trade tensions and lower-than-expected inflation data in April. Nikolay Karpenko of crypto market maker B2C2 stated that a surprise tariff suspension agreement between the U.S. and China improved market sentiment, leading to increased crypto inflows driven by corporate financial allocations and ETF demand.
Despite recent price stability, demand for call options has surged, indicating growing interest in potential upside risks. Ravi Doshi from FalconX highlighted renewed investor interest in upside exposure as Bitcoin nears its historical peak. Additionally, the rise in short-term options trading with concentrated strike prices could lead to a "gamma squeeze," where option sellers must hedge risks by buying more spot or futures contracts, potentially driving prices higher.
