Bitcoin has just given the options the breakout they were positioned for.
The major crypto passed $81,000 in Asian hours on Tuesday, its highest level since late January, up from $79,000 at the end of US trading hours on Monday and 5.3% higher on the week.
Other majors traded mixed. Ether held $2,379, off 0.1% on the day but up 4.0% on the week. XRP fell 0.9% to $1.40. Solana fell 0.9% to $84.84. BNB sat at $626. Dogecoin returned 1.0% to $0.1117 after last week’s run, although it remains the standout in the seven-day band of 12.4% as futures open interest continues to hover at annual highs.
The move came despite Brent crude reaching just $113 a barrel. barrel after rising 5.8% Monday on Iran’s disputed missile claims, with WTI near $104.
Indeed, the macro picture has not improved, although developments in the ongoing US-Iran conflict seem to be losing their grip on bitcoin.
US destroyers Truxtun and Mason passed through the Strait of Hormuz overnight, escorting two US-flagged vessels under what US Central Command described as “coordinated threats”. A VTTI oil terminal in Fujairah was hit in an airstrike. President Donald Trump told the Salem News Channel that the war could last another two to three weeks, meaning a previously announced four-week ceasefire is fraying.
Options markets are seeing a flurry of action with bets on higher prices in the coming days, Nomura’s market-making arm Laser Digital announced in a note shared with CoinDesk on Tuesday.
Bitcoin volatility has been quiet for most of the past week. Traders weren’t buying much in the way of option protection, and the price wasn’t moving fast enough to justify it. When desks paid for protection, they paid more for puts (bets that the price will fall) than calls (bets that it will rise)—the standard playbook in a market more worried about a fall than excited about a rally.
But underneath there has been quiet demand for cheap upside bets, structured through what traders call call ratio strategies. The trade involves buying call options that pay off if bitcoin goes up a little, and financing them by selling other call options that only pay off if bitcoin goes up a lot. The setup costs next to nothing up front and benefits if bitcoin grinds higher without tearing past the upper level.
“Should the spot price experience a decisive breakout above $80K, the current negative BTC risk reversal is expected to move into positive territory,” the note said.
A risk return is the difference in implied volatility between straight out-of-the-money calls and puts. When it is negative, the market is pricing in more fear of a fall than greed after a rally.
A turn to the positive would be the first signal that the options markets have indeed switched from cautious to constructive.
All major central banks held rates last week, which Laser Digital said reduces the right-tail distribution of rates and keeps U.S. financial conditions in their current range. Strategy reports earnings on Tuesday and US non-farm payrolls are out on Friday. Both can move bitcoin if the surprise is big enough.
