Bitcoin's Bullish Trend Driven by Soaring Call-Put Skew

Bitcoin's Bullish Momentum

Bitcoin has recently displayed a strong bullish trend, highlighted by a significant rise in the one-month call-put skew, exceeding 10% for the first time since April 2021. This increase in skew indicates a growing demand for call options, which represent a right to purchase and signal bullish sentiment, surpassing the interest in put options.

Market Dynamics and Price Surge

On the day Bitcoin's price surged past $36,800, optimism surrounding spot ETFs fueled this upward movement. The spike in call options shifted investor behavior, with many halting the sale of calls above the spot price—a common strategy for generating yield from holdings. Instead, speculators are now purchasing call options to gain leveraged exposure to potential price increases.

Market Maker Adjustments

This shift has left market makers with a notable net short exposure above $36,000. To achieve market neutrality, these market makers may need to purchase Bitcoin, potentially accelerating the rally further. This adjustment could drive additional upward momentum in Bitcoin's price.

Future Predictions and Sustained Strength

Longer-term predictions indicate that Bitcoin's bullish bias is expected to persist over the next two, three, and six months. The ongoing wave of call option purchases has contributed to a bullish skew exceeding 10%, marking a 31-month high. This trend suggests continued strength in Bitcoin's market outlook as demand for call options remains robust.

The increased interest in call options and corresponding market dynamics highlight a sustained positive sentiment for Bitcoin, with potential for continued price growth in the coming months.