Traders are betting on Bitcoin reaching $95,000 by October through a $3.2 million options trade, reflecting bullish sentiment in the market.
A significant options trade valued at $3.2 million has surfaced, employing a "long call butterfly" strategy that reflects traders' optimism about Bitcoin reaching $95,000 by the end of October. Currently, Bitcoin is trading at approximately $85,911.61, prompting speculation about further price increases.
This particular trade involves the acquisition of options set to expire on October 30, focusing on strike prices of $90,000 and $100,000 while simultaneously selling double the number of calls at the $95,000 strike price. Data from Laevitas reveals that this transaction occurred through the OTC desk Paradigm, segmented into five trades, which included 1,000 long calls at $90,000, 2,000 short calls at $95,000, and 1,000 long calls at $100,000, totaling around $3.17 million in initial costs.
The strategy aims to optimize profits if Bitcoin's price stabilizes around $95,000 at the time of expiry, with a profitable range set between $90,000 and $100,000. However, if Bitcoin’s price strays outside of this bracket, the trader risks the entire $3.17 million investment.
Expectations are for Bitcoin to rise from its current price to $95,000 within the next month, supported by a daily price chart showing little resistance between $85,000 and $98,000. The absence of significant historical resistance levels in this price range suggests a potential for Bitcoin to swiftly approach $98,000.
Furthermore, this butterfly trade reflects a growing bullish sentiment in the trading community, as evidenced by increased demand for call options and rising short-term risk reversals. Laser Digital has noted volatility in these risk reversals, with a notable preference for calls during Bitcoin's recent climb to $85,000, despite a slight dip observed this morning.
The options market is also indicating a broader appetite for volatility among major cryptocurrencies. According to Coinbase Markets, the anticipated price fluctuations are currently pegged at 8.9% for XRP, 8.0% for SOL, 6.9% for Ether, and 5.0% for Bitcoin through September 27. These figures reflect expected price movements rather than directional bets, with XRP showing the highest volatility risk.
