Bitcoin's 40% Recovery Drives Institutional BTC Options Buying

Bitcoin's (BTC) recent rally has shown significant momentum, with institutions increasingly investing in the leading cryptocurrency through Deribit's BTC options market. Deribit noted a substantial increase in institutional positioning on BTC over the past week, highlighting bullish flows in the BTC options market.

The exchange reported strong buying of call options at the $110,000 strike expiring in June and July, as well as calendar spreads involving a long position in the $140,000 strike call expiring at the end of September and a short position in the $170,000 strike call expiring at the end of the year. This demand for the $110,000 strike call suggests expectations for a continued price rise in the coming weeks, with the potential for an extended rise to at least $140,000.

A call option grants the purchaser the right, but not the obligation, to buy the underlying asset at a predetermined price on or before a specific date. The buying of call options indicates a bullish sentiment among market participants. Additionally, Deribit observed a rollover of long positions from May expiry to July expiry at strikes ranging from $110,000 to $115,000, further supporting the bullish outlook.

BTC topped $104,000, marking a near 40% recovery from the early April lows under $75,000. This recovery is driven by optimism surrounding the U.S.-U.K. trade deal and consistent inflows into the spot ETFs. Technical charts also suggest more gains ahead for BTC.

Ether, the native token of Ethereum's blockchain, has also seen a significant rise, increasing over 30% to $2,411 in just two days. This bullish breakout on technical charts has sparked interest in bullish ETH plays on Deribit, with traders purchasing June expiry calls at $2,400 and longer duration call spreads betting on gains up to $2,600-$2,800.