Bitcoin Just gave the options desk the breakout they were targeting.
The largest cryptocurrency topped $81,000 during the Asian session on Tuesday, its highest level since late January and up from $79,000 at the end of Monday’s U.S. trading session, up 5.3% for the week.
Other major trading varieties were mixed. Ethereum is trading at $2,379, down 0.1% on the day but up 4.0% for the week. XRP fell 0.9% to $1.40. Solana fell 0.9% to $84.84. BNB price is $626. Dogecoin retreated 1.0% to $0.1117 after rising last week, but still outperformed on a seven-day gain of 12.4% as futures open interest continues to be at year-highs.
The move came despite Brent crude surging 5.8% on Monday to fall to just $113 a barrel on Monday over Iran’s disputed missile claims, while WTI crude was near $104.
While developments between the United States and Iran appear to be losing control of Bitcoin, the macro picture is not actually improving.
The US destroyers USS Truxton and USS Mason passed through the Strait of Hormuz overnight, escorting two US-flagged ships through what US Central Command described as a “coordinated threat.” The VTTI oil terminal in Fujairah was attacked in an airstrike. President Donald Trump told the Salem News Channel that the war could last another two to three weeks, meaning a previously announced four-week ceasefire is unraveling.
Nomura’s market-making arm Laser Digital noted in a report shared with CoinDesk on Tuesday that the options market is showing a flurry of action betting on higher prices in the coming days.
Bitcoin volatility has been quiet for much of the past week. Traders weren’t buying much in the way of options protection, and prices weren’t moving fast enough to justify it. When trading desks do pay for protection, they pay more for puts (betting that prices will fall) than for calls (betting that prices will rise)—a standard strategy in a market that is more worried about falling than excited about rising.
But beneath that, demand for cheap upside bets, constructed through what traders call a bullish ratio strategy, has been quiet. The trade involved buying call options that would pay off if Bitcoin moved up slightly, and financing it by selling other call options that would pay off only if Bitcoin moved up significantly. This setup requires virtually no upfront costs and will benefit if Bitcoin moves higher without breaking through its top levels.
“If spot prices decisively break above $80,000, the current BTC risk reversal is expected to move into positive territory,” the report said.
Risk reversal is the difference in implied volatility between equally out-of-the-money calls and puts. When it is negative, the market is driven more by fear of the downside than greed of the upside.
A shift to positivity would be the first sign that the options market has actually moved from caution to constructive.
All major central banks kept interest rates unchanged last week, which Laser Digital said reduced the right-tail distribution of interest rates and kept U.S. financial conditions within current ranges. Earnings come on the heels of a strategy report on Tuesday and a drop in U.S. nonfarm payrolls data on Friday. Both can transfer Bitcoin if the surprise is big enough.
