Bitcoin’s Options Market Retains Long-Term Bull Bias Despite Sluggish Price

• Bitcoin's six-month put-call skew, which measures the cost of put options (bearish bets) expiring in six months relative to calls (bullish bets), is currently seen at close to -11%, according to data source Skew.
• In other words, demand for call options expiring in six months is outstripping demand for puts.
• The three-month skew is also leaning bullish at -5%.

• Since early September, skews for both these time frames have maintained a positive bias despite bitcoin's decline from $12,476 to $10,000 and more recent consolidation.
• That consolidation is seeing bitcoin carve out a narrowing price range on the daily chart.

• Triangles or low-volatility price consolidations usually end with a violent move on either side.
• According to the three- and six-month skews, investors appear to be anticipating a breakout.
• Prominent analysts like Willy Woo have also suggested the path of least resistance is on the higher side.
• Woo backs up his argument by saying on-chain data shows a bigger influx of new investors into the bitcoin market than was seen in the bull market frenzy of late 2017.
• According to Bannockburn's chief market strategist Marc Chandler, the U.S. dollar's long-term trend is bearish. As such, bitcoin and other dollar-denominated assets are unlikely to see big sell-offs.
• Nevertheless, if the triangle pattern ends with a downside break, chart-driven selling may bring a re-test of September lows below $9,900.
• Further, some investors appear to be hedging for a temporary price drop, a suggested by the positive 6.6% reading on the one-month put-call skew.
• At press time, bitcoin is trading above $10,699, little changed since midnight UTC.

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