In this week’s edition of Option Flows, Tony Stewart is commenting on the recent market movements.
Quite a day.
BTC breaches 100k asserting 103.6k ATH.
Call buyers at first add, anticipating further upside, but as Spot stalls, sellers of Dec 95k+110ks hit the tape.
Retrace below 100k remains controlled+orderly, funding+IV drifts lower.
Sudden cascade flush <90k and bounce.
2) Chart shows:
Initial buying of Dec 100+105+110k Calls on the breach of 100k.
Followed by Jan 110-160k Call spreads.
But as Spot stalls >103k, a seller of 95k Calls (odd data shows not a TP), and roll of 95k to 105ks, and then a fresh seller of Dec 110k Calls dominate the size.
3) IV and funding firmed as Spot pushed up, then drifted back as 100k didn’t hold.
A rumored OKEX whale sold BTC post-US hours into a lower liquidity window which set off a violent cascade <90k.
Option engines briefly turned off, IV raised higher, and little traded; BTC bounced.
4) BTC now knows its current bounds: 89k-103.6k.
ETH doesn’t arguably yet -within its short-term range- being obviously well below ATHs.
ETH Option Funds are still long Calls (+spreads), and ETH IV has been firming relative to Spot on this rally and sits at >10% premium to BTC.
View Twitter thread.
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ex-MS Head of Trading desk /BTC Vol. Prop trading /Option Market forensics/ Alter Ego account Digital Asset arena. Tweets are my opinion, not financial advice.