With the resumption of appetite for financial risk in global markets, Bitcoin ($BTC) surpassed the $75,000 level for the first time in a long time. Major altcoins, including Ethereum (ETH), are also showing signs of recovery. Ethereum rose 6.2% over the past 24 hours to $2,330, while XRP rose 9% to $1.56.
Although this increase is attributed to strengthening risk appetite resulting from a combination of factors in the market, such as the recovery of the Nasdaq index and the fall in oil prices, Markus Thielen, CEO of 10x Research, shared his latest analysis.
According to the analyst, the increase $BTC is due to increased put writing and liquidations in the options market.
According to Markus Thielen’s analysis, Bitcoin’s recent uptrend was triggered by options traders closing their put positions.
According to CoinDesk, Thielen believes the rally was influenced by a structural change in put trading between $55,000 and $60,000.
“The recent rise is largely due to the closing of puts with strike prices of $55,000 and $60,000, as their probability of realization at expiration has decreased.”
Put options provide protection against falling prices, and investors typically buy them when they expect the market to slow down. In this context, a decrease in put options also signals a reduction in market downside expectations.
In this context, Thielen noted that during February’s sharp decline, investors massively purchased options to protect against downside risk. However, as the market stabilized, the likelihood of these options being in the money at expiration decreased, leading investors to close their put positions.
Thielen argues that this process creates bullish momentum, as closing puts reduces the selling pressure of market makers managing their risks, forcing them to buy. $BTC rebalance their positions, which could ultimately push the $BTC higher price.
*This does not constitute investment advice.
