“This week we’ve seen some big blocks in BTC topside call spreads,” Jean-David Péquignot, Chief Commercial Officer at Deribit, told CoinDesk.
Option flow of this size and repetition often reflects institutional positioning rather than retail activity, given the capital required and the precision of the strike selection.
The timing is notable for two reasons. First, it suggests confidence in bitcoin’s recent rise to $64,000 from below $58,000 earlier this month. More importantly, the trade is targeting the July 31 settlement, two days after the Federal Reserve’s July 29 interest rate decision. The call spread flow suggests that at least some major traders expect the rally to serve as a catalyst for a move toward $72,000.
Fed funds futures are currently pointing to a hold on the July meeting, with most trackers putting the likelihood of the central bank keeping its benchmark interest rate unchanged at 3.5%-3.75% in the 75%-80% range. The remaining odds are divided between an interest rate increase and, to a lesser extent, a reduction.
The fear of interest rate increases has subsided following inflation data from June, which showed a sharp slowdown in price pressure at both consumer and producer level. Much of the relief can be traced to a sharp rebound in oil prices during the month, tied to a cease-fire between the US and Iran; core inflation, which strips out food and energy, was flat.
