Crypto: Crypto Options Activity Is Keeping Bitcoin Stuck Near $90k, Says...

High options volume and concentrated open interest around key strike prices are keeping Bitcoin rangebound as traders favor hedged positions over leverage.

High Bitcoin options volumes indicate there is still significant interest and capital present in crypto derivatives markets, according to derivatives exchange Deribit, but risk is now being carefully managed, which could explain Bitcoin’s recent price movements.

Bitcoin trading near $90,000 right now “looks a lot clearer when you view it through positioning rather than just price,” the Coinbase-owned derivatives exchange said on Wednesday.

Bitcoin (BTC) appears to be stuck due to concentrated options open interest (OI) around current strike prices for the large Jan. 30 expiry, it added.

This means a “significant share of market exposure is structured through options rather than outright leveraged futures,” they stated.

Bitcoin has been trading in a range-bound channel since mid-November, finding support around $85,000 and resistance around $95,000, and oscillating between the two levels.

Deribit explained that high options volume in near-term expiries, particularly puts (shorts), suggests that traders are managing risk, making price movements more sensitive to hedging flows than external news.

Related: Bitcoin futures OI rebounds 13% as analysts see cautious return of risk appetite

“Rallies may meet supply from risk reduction, dips can find buyers adjusting exposure, and momentum often has to work harder to expand,” they stated.

Total Bitcoin options OI, or the notional value of contracts yet to expire or be closed, is currently around $38.7 billion and has been rising steadily this month, according to CoinGlass.

Source: CoinTelegraph