By Frances Yue

Published: Nov. 16, 2024 at 7:34 a.m. ET

Bitcoin hit a record high at $93,445 on Wednesday.

Bitcoin has kept refreshing all-time highs over the past few days, leading to increased investor interest but also concerns whether it would be too late to join the game.

However, based on options market data, crypto derivatives traders look overwhelmingly bullish, placing bets in the market that bitcoin has more room to rally, noted Luuk Strijers, chief executive at crypto derivatives exchange Deribit.

hit a record high at $93,445 on Wednesday, according to Dow Jones Market Data. It traded at around $90,984 Saturday morning, up 151% in the past year.

For bitcoin options expiring on Dec. 27, the open interest for call options stood at around 79,216, about twice as much as that for put options, which were roughly 39,505, according to data from Deribit.

Open interest refer to the total number of outstanding derivative contracts for an asset. Call options give the holder the right, but not the obligation, to buy the underlying asset at a certain price by a set time and a put option provides the same right to sell. When the number of call options exceeds the put options, it is usually a bullish sign for the asset price.

Meanwhile, for options expiring on Dec. 27, call options with a strike price at $100,000 are seeing the highest amount of open interest, which are indicative of investors’ bets that bitcoin could reach as high as $100,000 by year-end.

For options expiring on March 28 next year, the open interest for call options was roughly 40,632, over 170% higher than that of put options at 14,680, according to Deribit data. Among these options, call options with a strike price at $120,000, $110,000 and $100,000, respectively, were seeing the highest amount of open interest.

“So what are people doing? They are positioning for further upside,” Strijers said in a phone interview.

Sean Farrell, head of digital asset strategy at market research firm Fundstrat, echoed the point.

While it is possible to see a temporary consolidation in bitcoin, many signs that were previously indicative of froth are not present in the current market, Farrell wrote in a recent note.

The annualized funding rates, or the cost of leverage in bitcoin perpetual futures, briefly spiked to as high as 59% on November 12, the loftiest since March, before falling back to around 12.9% on Friday, according to data from CoinGlass.

However, historical data showed that the market could usually sustain levels of 20-50% annualized for weeks before it ran out of steam, Farrell noted.

“This level of leverage can persist as long as it is paired with capital inflows and strong spot demand,” Farrell said.

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About the Author
Frances Yue covers the cryptocurrency market for MarketWatch.