Bitcoin Eyes $100K Amid Bullish Options, Hits $63,470

Key Takeaway

• Bitcoin's price surge to $63,470 sparks options traders' bets on reaching $100K, driven by Fed's policy stance and weak NFP data.
• Deribit sees over $688 million in $100K strike call options, indicating strong bullish market expectations.
• Analysts cite U.S. election cycle, deficit spending, and a weaker dollar index as supportive factors for Bitcoin's potential rise to $92K.

Bitcoin's Bullish Surge

Bitcoin's recent price upswing has reignited the optimism among options traders, with many now betting on the cryptocurrency's potential to hit the $100,000 mark within the year. This renewed enthusiasm follows a more than 12% increase in Bitcoin's price to $63,470, spurred by Federal Reserve Chairman Jerome Powell's announcement last Wednesday, which ruled out further tightening or rate hikes as the next policy move. The subsequent disappointing U.S. nonfarm payrolls data only served to validate Powell's stance, further fueling Bitcoin's recovery.

Options Market Heats Up

The optimism has translated into a significant uptick in demand for Bitcoin call options, particularly on Deribit and over-the-counter (OTC) networks, targeting a rally beyond $75,000 and even to $100,000. QCP Capital noted a "bullish follow-through in volatility and rates" and highlighted the "renewed demand for BTC Sep expiry $75,000 and $100,000 calls." Similarly, Paradigm observed an increased appetite for out-of-the-money calls, with significant trades aiming for higher strikes, indicating a strong bullish sentiment in the market.

Analysts Align on Bullish Outlook

Both fundamental and technical analysis converge on a bullish outlook for Bitcoin. 10X Research adjusted their "line in the sand" to $62,000, citing the U.S. election cycle and ongoing deficit spending as key supports for the market. Swissblock Insights pointed to a defensive dollar index (DXY) unless Powell's stance is challenged, noting that a weaker DXY typically benefits risk assets like cryptocurrencies. Furthermore, Elliot wave analysis by John Glover of Ledn suggests a potential rise to $92,000, reinforcing the bullish sentiment.

Street Views

• QCP Capital (Bullish on Bitcoin):

  "We are seeing some bullish follow-through in volatility and rates following the reversal bounce from Friday and into the weekend. BTC risk reversals have gone positive (calls more expensive than puts), and [there has been a] renewed demand for BTC Sep expiry $75,000 and $100,000 calls."

• Paradigm (Bullish on Bitcoin):

  "The options market seemed to anticipate a short-term leg higher up earlier this morning with top BTC and ETH trades on Paradigm consisting of OTM calls bought in size. We noticed the previous March 25 [expiry] $200,000 call buyer closing his position to buy the July 2024 [expiry] $85,000 strike."

• 10X Research (Bullish on Bitcoin):

  "Bitcoin continues to be supported by the U.S. election cycle and ongoing deficit spending. This is why we have adjusted our 'line in the sand' from 68,300 to 62,000 in our report from May 3 — the market could trade (tactically) bullish above 62,000."

• Swissblock Insights (Neutral/Bullish on Cryptocurrencies/Dollar Index):

  "The dollar's weaker position is likely to persist as long as economic data remains supportive of that direction and as long as Federal Reserve officials don't counter Powell's stance. The labor market is showing signs of loosening, but more hawkish Fed voices could still push for keeping rates higher for longer, which may impact the dollar's trajectory."