Bitcoin’s recent surge past $101,000, reaching its loftiest heights in over three months on May 8, has ignited fresh discussions within the cryptocurrency community. With a 4.6% daily boost, this landmark price movement obliterated $205 million worth of bearish futures positions and rendered nearly every put option—that’s a type of option betting on price declines—worthless. Now, with eyes set on the possibility of shattering its all-time high of $109,354, the market buzzes with anticipation. Could this be the moment Bitcoin enthusiasts have been waiting for? As explored in our previous coverage of Bitcoin’s rise past $94,000, institutional interest and market optimism have been key drivers in recent price movements.
Bullish Options Strategies in Play
The world of Bitcoin options is a complex one, and right now, it appears to be skewed heavily towards optimism. At Deribit, a major crypto options exchange, traders have been making significant moves with strategies such as the “bull put spread.” This involves selling a put option while buying another put at a lower strike price—essentially hedging bets while hoping for upside.
Notably, the aggregate open interest in Bitcoin put options for the May through July period stands at $8.3 billion. Yet, a whopping 97% of these options were placed below the $101,000 mark, suggesting they’re likely to expire worthless unless there’s a dramatic price downturn. This doesn’t mean that all traders were betting on a decline; some were undoubtedly capitalizing on the upward trajectory.
The Short Squeeze Possibility
Here’s where it gets interesting: if Bitcoin can hold its ground above $100,000, many bullish strategies could bear fruit during the May and June options expiries. This scenario might encourage traders to keep pushing prices higher. However, the shorts—those betting against Bitcoin—aren’t entirely out of the picture. With the open interest in Bitcoin futures currently at a staggering $69 billion, the potential for shorts to apply pressure is significant, possibly trying to cap any further price ascension.
Yet, in the event of Bitcoin surpassing $105,000, a phenomenon known as “short covering” could come into play. This occurs when short sellers rush to buy back their positions to cut losses, which in turn can propel prices even higher. But, the impact of such a surge might be muted if traders have hedged their bets through strategies like the “carry trade”—where they balance out their exposure by holding both spot and futures positions. This mirrors the optimism seen when Bitcoin jumped above $97K amid hopes for a U.S.-China trade deal.
Historical Trends and Future Implications
Historically, Bitcoin’s journey has been anything but predictable. With its futures premium lingering below 8% for the past few months, incentives for carry trades have been limited, but the dynamics could shift rapidly. If momentum builds and Bitcoin breaches the $105,000 threshold, the path to a new all-time high could open up over the next couple of months.
However, skepticism remains a healthy part of the discourse. While the current climate is bullish, the market has its ways of surprising even the most seasoned traders. Questions linger: Can Bitcoin sustain this upward momentum, especially in a market known for its volatility? And how will external factors, such as regulatory changes or macroeconomic shifts, play into this unfolding drama?
In the ever-evolving landscape of cryptocurrencies, one thing is certain: the coming weeks promise to be a thrilling ride for Bitcoin enthusiasts and skeptics alike. As traders navigate these turbulent waters, the digital currency’s next moves could redefine the boundaries of its potential.
Source
This article is based on: Bitcoin options could pave the path for new BTC price highs — Here is how
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
