Bitcoin investors start profit booking, price hits one-week low, call-put skew drops 30 percent.

New Delhi: The world's largest cryptocurrency, Bitcoin, fell from a record high of $99,830 on November 22, 2024, to a one-week low of $91,377.32 on November 26, 2024, marking a decline of 8 percent. According to a Reuters report, Bitcoin's failure to cross the $100,000 mark could lead to further pressure among investors, especially when profit booking may begin with the expiry of important options in December.
 

The tremendous growth of bitcoin

Bitcoin's price has risen by 120 percent in the past year, and is expected to jump by 34 percent in November 2024 alone. This rise is being linked to the US elections and the victory of crypto-supporting presidential candidate Donald Trump. Trump supported digital assets during the election campaign and promised to make the US the "global hub of crypto" and create a national reserve of bitcoin.
 

Investors remain cautious

According to the report, $11.8 billion worth of Bitcoin options contracts expire on December 27, 2024, and investors are bracing for potential big changes on this day. Nick Forster, founder of a decentralized protocol called Deriv, told Reuters that the "call-put skew" index for the December 27 options expiry has fallen by 30 percent from the previous day, making it clear that market participants have now turned to more safety strategies.

Importance of Call-Put Skew

"Call-put skew" refers to the difference in implied volatility between calls (buy options) and puts (sell options). According to Forster, “This indicates that traders are hedging against potential downside risks, although such patterns are more commonly seen in bull markets.”

The future prospects of bitcoin

Forster also said that there is a 68% chance that Bitcoin will fall to $81,493 (a 16.03% drop) and rise to $115,579 (a 19.9% ​​increase) by December 27. He says that this "close similarity" makes it clear that the market is expecting significant volatility soon.

Decline due to profit booking

Analysts believe that the recent decline in Bitcoin may also be due to normal profit booking. Anthony Pompliano, founder-CEO of Professional Capital Management, said in a letter to his clients that long-term Bitcoin holders have distributed $60 billion worth of supply in the last 30 days.
Apart from this, he also said that since the price of Bitcoin fell to $15,479 after the FTX collapse, 21 percent of the supply was distributed in November 2024, which is said to be the biggest profit booking of this cycle.