• Bitcoin options market turns negative on short-term BTC price outlook but longer-term bullish bets remain.
• Investors demand bearish put options for short-term downside protection as BTC falls into the low $28,000s.
• Investors remain bullish on Bitcoin’s longer-term price outlook due to macro factors and technical developments.
Short Term Outlook Negative
Investors have turned their most bearish on Bitcoin’s short-term price outlook in more than one month, according to options market data presented by crypto data analytics website The Block. The 25% delta skew of Bitcoin options expiring in seven days fell to around -2 on Friday, its lowest level since the 14th of March. A 25% delta skew of below zero means that bearish Bitcoin put options expiring in seven days are trading at a premium versus equivalent bullish call options, suggesting investors disproportionately demand the former. This increase in demand comes as Bitcoin falls into the low $28,000s.
Longer Term Outlook Remains Bullish
Despite the 7-day 25% delta skews weakening to its lowest level in over a month, the 180-day 25% delta skew remains at fairly elevated levels of above 3. That means that bullish Bitcoin call options expiring in 180 days are trading at a premium versus equivalent bearish put options, suggesting investors disproportionately demand the former. Investors remain confident in BTC’s longer-term outlook due to numerous macro factors and technical developments such as Bitcoin’s bounce from its 200DMA and Reali Platform upgrade earlier this year.
US Federal Reserve’s Tightening Cycle Close To Ending
Significant uncertainty remains about how many more times the US Federal Reserve will lift interest rates and when it will start cutting them, but one thing seems certain – the end of the Fed’s tightening cycle looks close as US inflation and economic growth decelerate. This implies that unfavorable changes to financial conditions are unlikely to return as a major headwind to crypto markets in 2023, as was seen last year 2022.
Key Technical Developments Supporting Price Action
Bitcoin is likely to continue receiving tailwinds from key recent technical developments including 1) BTC bouncing from its 200DMA and Reali Platform upgrade earlier this year.. These fundamentals could continue boosting investor confidence towards BTC’s long term potential even if there is some immediate downside pressure on prices due to other external events like increased regulation or exchange hacks etc..
In conclusion investor sentiment towards bitcoin has shifted slightly negative after seeing some short term declines but overall still remains very positive for long term prospects due to strengthening fundamentals like improved technology upgrades and reduced headwinds from tightening fx policies which could lead towards further appreciation for bitcoin’s value over time despite any temporary dips along way