The price of Bitcoin (BTC) has increased to register maximums, which caused optimism among investors. However, the expected coverage activities of the manufacturers/distributors of the market, often an invisible force, at certain price levels, can stop the ascent.
The leading cryptocurrency exceeded the $ 111,000 mark during Asian hours, and analysts anticipated a stronger demand.
“The OTC supply may be drying, increasing prices. This would not be reflected in the change negotiation volumes or in the derivative market. If this is the case, prepare for a wild trip, as more demand will come on board with a competitive treasure environment of the Bitcoin treasury and, perhaps, a less elastic spot market of OTC,” said Alexander S. Blume Founder and CEO Investment Advisor, first two.
Blume explained that the corporate treasures that rise on board have been buying “in mass” free sale, and rumors are that the sovereign demand of cryptocurrency has increased.
Ryan Lee, Bitget chief analyst, said BTC could recover at $ 180,000 by the end of the year, led by Spot ETF tickets, a slower supply growth after hearing and a growing institutional adoption.
“Moody’s recent reduction of the sovereign credit rating of the United States to AA1 is another key macro catalyst, which caused a renewed interest in BTC and ETH as hedges against the risk of Fiat. BTC’s ability to keep over $ 103,000 in the midst of volatility highlights market change towards crypto as a strategic reserve performance,” Lee said.
Focus on $ 115k
While the lowest resistance path is on the highest side, the rhythm of the upward movement can be challenged by possible coverage activities of the options of the options market in around $ 115K and higher prices levels, according to Jeff Anderson, head of Asia in STS Digital.
Concessionaires are entities responsible for creating liquidity in the order book of an exchange. They are always on the opposite side of merchants’ positions and earn money with the offer, while constantly striving a neutral exposure at a net price.
Detribit BTC options market data, tracked by Amberdata, show that dealers have a significant exhibition of “positive gamma” to $ 115K and higher levels of exercise prices.
When the concessionaires gamma is positive, it means that they are long calls or sale options. In this case, its delta (market exposure) increases when the underlying asset increases. Therefore, its delta coverage mandate requires selling more of the underlying asset as the price and vice versa increase.
The flow of the order, therefore, acts as a opposite force, which limits the volatility of prices, Anderson said to Coindesk.
The Gamma dealership is significantly positive, from $ 115K to $ 150K, thanks to the interest of investors in selling (overwritten) higher strike purchase options to generate additional performance in addition to their holdings.
“There is a lot of positive gamma in the market due to writer’s leftover calls. [rally] I could really start leaving, “Anderson said.
