The new year is just around the corner. Will there be fireworks for bitcoin or will the cryptocurrency fizzle out? The BTC price has been fluctuating between $84,000 and $92,000 for some time. Some crypto traders are betting on complete chaos and expect a drop to $20,000. Converted, that is a price of €17,000, a loss of tens of percent. Other investors are aiming for an unprecedented rally towards $200,000. Why do some investors expect a megacrash and others a historic sprint to the top? High time to compare the different scenarios.
Bitcoin Traders Speculating on $20,000 #
Bitcoin has risen by about 5 percent in the past week. Yet some crypto traders think the price will soon do the exact opposite. On the derivatives market, a large group of investors are massively betting on a price of $20,000.
On the derivatives market, people do not trade directly in bitcoin, but in special contracts. These are known as derivatives. Options, a category of derivatives, give traders, for example, the right to sell or buy bitcoin in the future at a predetermined price, the so-called strike price.
With options, there is a difference between call options and put options. With a ‘call’, someone has the right to buy and with a ‘put’ the right to sell. This way, traders speculate on price increases or decreases of a cryptocurrency like bitcoin.
On the crypto exchange Deribit, $20,000 is the second most popular strike price for put options expiring in June 2026. At first glance, this suggests that traders anticipate a strong price decline for the cryptocurrency. Sidrah Fariq, Global Head of Retail at Deribit, said the following about this:
There are approximately 2,117 open option positions on the bitcoin put option at $20,000 expiring in June. We also saw large transactions in the 30,000 put and the 230,000 call.
It’s Not Exactly What It Seems #
However, another scenario for bitcoin is also possible. On the exchange, there are also many traders active with open call options with a strike price of more than $200,000. The fact that so many traders are betting on extreme price declines or increases does not necessarily mean that traders really think the market will move in that direction.
Options can serve as protection, just in case. This allows traders to hedge against possible scenarios. Moreover, options with such extreme strike prices are relatively inexpensive. It can also be a way to earn money cheaply from extreme volatility.
What the Bitcoin Price Is Doing #
Currently, there are no signs that a strong rise or fall is coming soon. The bitcoin price even shows little volatility and has been moving in a narrow price range between $84,000 and $92,000 for weeks.
At the time of writing, bitcoin is worth $92,701, after the price rose by about 2 percent in the past 24 hours. The BTC price differs little compared to a week ago.
