Bitcoin’s (BTC) price has risen to detect heights, triggering optimism among investors. However, expected hedging activities of market manufacturers/dealers, often an invisible strength, can slow down the increase.
The leading cryptocurrency peaked the $ 111,000 mark in the Asian hours, with analysts expecting stronger demand.
“The OTC supply may dry up and increase prices. This would not be reflected in the exchange of trading in quantities or the derivative market. If this is the case, be ready for a wild ride as more demand is coming on board with a competitive Bitcoin company environment and maybe a less elastic OTC Spot market,” Secristered Investment, which advises two elastic OTC spot market, “Alexander S. Blume ,, As Seco-Registered Investment Advisor, who advises.
Blume explained that corporate treasures coming on board have bought over-the-counter “a lot” and the rumors are that the sovereign demand for cryptocurrency has gathered.
Ryan Lee, chief analyst at Bitget, said BTC could gather for $ 180,000 at the end of the year, led by SPOT ETF flow, slower growth in halving delivery and growing institutional adoption.
“Moody’s recent downward adjustment of the American superb credit rating to AA1 is another important macro -catalyst that triggers renewed interest in BTC and ETH as hedges against FIAT risk. BTC’s ability to hold over $ 103,000 in the middle of volatility highlights the market for Krypto as a strategic reserve,” Lee said. “
Focus on $ 115,000
While the path with the least resistance is on the higher side, the pace of the bullish feature may be challenged by potential coverage of option market manufacturers/dealers at about $ 115K and higher price levels, according to Jeff Anderson, head of Asia at STS Digital.
Dealers are devices that are tasked with creating liquidity in an Exchange’s order book. They are always on the opposite side of the dealers’ positions and make money from the bid-ash spread, while constantly striving to maintain a net price neutral exposure.
Data from Deribits BTC Options Market, Tracked Amber Data, shows that dealers have a significant “positive gamma” exposure to $ 115K and higher strike price levels.
When dealers’ gamma is positive, it means they are long calls or sets opportunities. In this case, their delta (market exposure) increases when the underlying asset increases. Thus, their delta-waiver mandate requires to sell more of the underlying asset when the price rises and vice versa.
Order-Flow therefore acts as a contraric strength that limits award volatility, Anderson told Coindesk.
Dealer Gamma is significantly positive, from $ 115,000 to $ 150,000, thanks to investors’ interest in selling (overwriting) higher strike call options to generate additional yields on top of their spot possession.
“There are many positive gamma on the market due to caller overwriting. They will be more on duty against this breakout and if we can clear the Gamma’s pocket for $ 115k, this [rally] Could really start walking, ”Anderson said.
