While bitcoin (BTC) continues to reach new lifetime highs, the latest options market trend indicates that traders aren't chasing the uptrend with the same zeal as before. On Monday, BTC's price rose above $107,000, surpassing the previous peak on Dec. 5 and taking the cumulative post-U.S.-election gain to over 50%, CoinDesk data show. The rally follows President-elect Donald Trump's assurance that the U.S. will build a bitcoin strategic reserve similar to its strategic oil reserve. Analysts expect the winning streak to continue next year, with prices ranging between $150K to $200K by the end of the following year. However, the current pricing of options trading on Deribit indicates that traders aren't chasing the rally like they used to, signaling a more cautious outlook for the short term. At press time, the 25-delta risk reversal for options expiring on Friday was negative, indicating the relative richness of put options that provide protection against price drops. Puts expiring on Dec. 27 were trading at a slight premium to calls, while the risk reversals extending to the end of March end expiry demonstrated a call bias of less than three volatility points. That starkly contrasts the trend we've observed over the past few weeks, where traders aggressively chased new price peaks, driving short-term and long-term call biases to over four or five volatility points. In fact, short-term risk reversals frequently displayed a stronger call bias than their longer-term counterparts. The latest block trades coming through on Deribit, as tracked by Amberdata , also show a bearish lean. The top trade so far today has been a short position in the Dec. 27 expiry call at the $108,000 strike followed by long positions in the $100,000 strike puts expiring on Dec. 27 and Jan. 3. The cautious sentiment could be due to concerns that on Wednesday the Federal Reserve will signal fewer or slower rate hikes for 2025 while delivering the widely expected 25 basis points rate cut. Such an outcome could accelerate hardening of the bond yields, strengthening the dollar and denting the case for investing in riskier assets. Perhaps, sophisticated BTC traders are positioning for a correction.
