Investors have turned on their most bearish of bitcoin The short-term price outlook in over a month, according to options market data presented by crypto data analytics website The Block.
However, at the same time, investors remain confident of BTC Long term perspective.
skew of 25% delta Bitcoin Options expiring in seven days fell to nearly -2 on Friday, its lowest level since May 14.th of March.
25% delta skew below zero means bearish Bitcoin Put options expiring in seven days are trading at a premium versus equivalent bullish call options, indicating that investors are more in demand on the former.
As bitcoin falls to the low of $28,000, there is an increase in demand for short-term downside protection (which put options provide).
At the current level of $28,200, BTC is down nearly 9%, having hit a multi-month high of over $31,000 earlier in the month, which is expected to break below its 21-day moving average (which is expected to provide resistance on Thursday). seemed) and below an uptrend that was supporting price action in late March/early February.
With bitcoin trading below some key short-term support levels, the risk of an extended correction towards the $26,500 and $25,200-400 areas has increased.
Investors bullish on long-term BTC price outlook
Despite the 7-day 25% delta skew weakening to its lowest level in a month, the 180-day 25% delta skew remains well above 3.
This means that bullish bitcoin call options that expire in 180 days are trading at a premium versus equivalent bearish put options, suggesting that investors place more demand on the former than on the former.
And when you consider macro factors, on-chain trends, and medium to long-term technical indicators, the belief in bitcoin’s long-term price outlook is understandable.
While significant uncertainty remains about how often US Federal Reserve will raise interest rates and when will it start Cutting To them, one thing seems certain – as US inflation and economic growth decline, the Fed’s tightening cycle appears to be coming to an end.
This implies that adverse changes in financial conditions are unlikely to return as a major headwind for crypto markets in 2023, as they were in 2022.
Meanwhile, bitcoin is likely to continue to receive tailwinds from recent major technical developments, including 1) bitcoin’s spectacular jump from the 200DMA to true value in mid-March and 2) bitcoin’s “golden cross” (when the 50DMA moves from the 200DMA to the 200DMA). went up) in early Feb.
elsewhere, a litany of On-chain and market cycle indicators Screaming that last year’s low marked the end of the crypto bear market. Many investors will be convinced that bitcoin 2023 bull market Will be alive and well.
So, expect bargain hunters and dippers to be eagerly waiting to jump in every time there is a significant drop in bitcoin’s value, as happened during mid-March.