Bitcoin Set to Break Record High? Options Market Bets on $74,000 Milestone

Market data reveals a growing trend among Bitcoin (BTC) options traders, who are increasingly betting on the asset to set a new price record this month.

According to a market update from digital asset hedge fund QCP on Wednesday:

“There has been a significant buying of call options expiring in June, indicating that the options market is positioning for a breakthrough above the 74,000-point historical high this month.”

Options are derivative contracts that grant the buyer the right to buy or sell an asset at a specific price before the contract expires. If the underlying asset doesn’t reach the strike price (resulting in a loss), the option will expire worthless. Purchasing call options indicates a bullish outlook on the asset’s price, whereas buying put options signifies a bearish view.

Institutional crypto derivatives trading network Paradigm commented:

“Today’s options flow is markedly bullish, with substantial long positions in BTC out-of-the-money (OTM) call spreads for late June and smaller scales for late July.”

Joshua Lim, co-founder of the major cryptocurrency derivatives trading company Arbelos Markets, highlighted:

“On Tuesday, we observed a highly concentrated buying of call options, with approximately 1,100 call spread contracts bought, expiring on June 28, with strike prices ranging from $74,000 to $80,000. This equates to a nominal demand of around $80 million.”

A call spread is an options trading strategy where one buys call options with a lower strike price while selling the same number of call options with a higher strike price and the same expiration date, aiming to profit from a limited price increase.

Since hitting a record high just under $74,000 in mid-March, Bitcoin has been consolidating for nearly three months. After briefly dipping below $57,000 in early May, Bitcoin has steadily rebounded and is currently trading around $71,000, just shy of a new all-time high.

In a Wednesday post on X, cryptocurrency investment service Matrixport stated:

“Bitcoin appears poised to squeeze higher, supported by significant inflows into US spot Bitcoin ETFs and an increase in open interest in the futures market.”