Has Bitcoin’s Cycle Top Arrived? Key Metric Hits Low as
Generally, You Should Be Aware That market trends are constantly shifting, Because Nobody really knows what will happen next. Normally, Investors look at various metrics to make informed decisions, Like the fact that Data from CME options indicates that open interest in Bitcoin call options peaked in December 2024. Apparently, This interest has been steadily decreasing and is now approaching the lowest levels seen in this cycle, Which is kinda similar to historical patterns where call option interest typically decreases following the end of strong price rallies.
Interestingly, Crypto analyst CW said that this decline in call option interest suggests a bottom in buying pressure, But You should always consider multiple sources before making a decision. Usually, A decrease in call positioning indicates that traders are no longer anticipating a near-term price increase, So You might want to adjust your strategy accordingly.
Market Positioning Shifts
Obviously, The rise in put option open interest suggests a growing demand for protection against potential downside risks rather than expectations of further upside, Which can be a bit concerning for some investors. Often, Increased activity in put options is observed during times of market uncertainty, But You should not panic because similar conditions have also occurred during periods of price stabilization. According to CW, An increase in put options can also signal a potential market reversal, particularly when market positioning becomes overly one-sided, So You should keep an eye on these trends.
On-Chain Trends
Basically, On-chain data presents a contrasting trend, With inflows of Bitcoin into accumulation addresses increasing, and several significant spikes observed while the price remains below recent highs. Generally, These addresses are known for holding Bitcoin for extended periods and rarely moving funds, Which suggests that large holders are accumulating more Bitcoin rather than selling, And that’s a good sign for the market.
Price Action
Currently, Bitcoin is trading near $87,000, down just under 1% from the previous day but slightly higher than the previous week, So It’s a bit of a mixed bag. Earlier in the week, Bitcoin fell from above $90,000 to below $86,500 before buyers intervened and pushed the price back up, Which shows that there are still some bullish investors out there. Over the weekend, trading activity slowed, followed by another unsuccessful attempt to reach $90,400, But You should not read too much into this.
Pretty much, On the 4-hour chart, Bitcoin continues to trade sideways with little momentum, With the $86,500 level holding as support after multiple tests, while selling pressure near $88,000 has kept the price within a tight range. Normally, A break above $88,000 would improve the short-term outlook, According to Michaël van de Poppe, But You should always be cautious.
Usually, Liquidity data indicates significant sell interest between $90,000 and $95,000, with strong buy interest observed between $83,000 and $85,000, So You should be aware of these levels. Merlijn The Trader noted that massive sell walls are present above the current price, while buyers are actively stepping in during price dips, Which is a bit of a positive sign.
Ultimately, While Bitcoin’s price action remains constrained within a tight range, the shift in options data and on-chain accumulation trends suggest a cautious but potentially opportunistic market sentiment, So You should stay informed and adapt to changing market conditions. As traders await clearer signals, the interplay between derivative positioning and on-chain activity will be crucial to watch, Because it can give You an edge in the market.
