As the cryptocurrency market rallied due to the recent wave of bullishness, the shakeout is nearing its end. Or is it? Bitcoin pumped above $22,000 on Monday, marking its highest level in over a month. (since June 16)
According to Binance, Bitcoin's price rose 2.76% to $22,820.59 on Monday, making it the most valuable cryptocurrency in the world. In comparison, Apple is still worth 2.5 times more than all cryptocurrencies combined; no one knows the real value of crypto.
Ethereum, another cryptocurrency, surged 8.94% to $1,466 by Monday's end.
Bull trap?
IMHO, the current crypto pump is not going to continue for long. It started with ETH merge-upgrade new, pumping the price, resulting in over $180 million of ETH short liquidated on June 16, then another $246 million short liquidation on June 18. MATIC, for whatever reason, also pump together ETH, which could be a sign of bull FOMO.
BTC Option's Sentiment
We all know how retail, spot and social media think of this crypto rally. The bull and Twitter are already FOMOing as the Crypto Fear and Greed Index shot up to 30 today. But what about the sentiment on options trading?
[source: genesisvolatility.io]
There is a huge volume of options going to expire on July 29. July 29!? I wonder what's going to happen around that time, hmm (hint: It has something to do with the FED and interest rate).
[The IV skew shows steepens on the left side, which is a sign of bearishness.
Source: genesisvolatility.io]
When the Options Skew steepens to the left, it signifies that the IV of OTM Puts is increasing at a faster rate. This occurs when there's a high demand for OTM Puts. That means options traders are betting the market will dump after the FED raises the interest rate on July 28. While Twitter is bullish, the options market is very bearish, as the IV suggest that OTM puts are trading at a premium.