Bitcoin ETF FOMO Wanes: What Do Bitcoin Option Data Indicate?

• Bitcoin price has recorded a 2.2% increase in the last 24 hours, surpassing $43,000. Bitcoin’s market capitalization is approaching the $850 billion level.
• According to the latest analysis by Santiment, historical patterns of crowd discussions around Bitcoin indicate a significant transformation, signifying a change in market sentiments.
• ARKB leads in terms of volume, closely followed by FBTC. While there has been a decrease in the volume of the long-standing Grayscale Bitcoin Trust (GBTC), others have seen an increase.

As the week comes to an end with Bitcoin’s price moving within a limited range, what do Bitcoin option data suggest for the price?

FOMO Excitement for Bitcoin ETFs is Diminishing

Bitcoin’s price has seen a 2.2% increase in the last 24 hours, surpassing $43,000. Bitcoin’s market capitalization is approaching the $850 billion level. Despite selling pressure in the BTC market, Bitcoin ETFs continue to attract significant interest and inflows. However, the initial FOMO (Fear of Missing Out) associated with the arrival of Bitcoin ETFs appears to be diminishing due to Bitcoin’s relatively calm performance.

According to an analysis by on-chain data provider Santiment, the historical patterns of crowd discussions around Bitcoin have undergone a significant transformation, indicating a change in market sentiments. Traditionally, a high rate of crowd discussions focusing on Bitcoin is considered a fear indicator.

However, Santiment notes that the story has changed since the middle of 2023. The enthusiasm and optimism surrounding Exchange-Traded Funds (ETFs) for Bitcoin have turned high Bitcoin discussions into a greed indicator. This shift is attributed to unrealistic expectations for market performance following ETF approvals.

Three weeks after the SEC’s approval of Bitcoin ETFs, Santiment observes that this indicator is beginning to normalize. However, the analysis points to a potential risk: if the high discussions related to altcoins surpass those about Bitcoin in the first week of February, it could push the Bitcoin discussion rate into an unfavorable “unhealthy” zone.

In a context where previous increases in Bitcoin’s social dominance heralded predictable market peaks, a negative increase in this context could indicate that Bitcoin is once again being overlooked. Santiment notes that despite recent declines, Bitcoin ETFs still attract significant trading volume. ARKB leads in terms of volume, closely followed by FBTC. While there has been a decrease in the volume of the long-standing Grayscale Bitcoin Trust (GBTC), others have seen an increase.

Bitcoin Option Data

According to GreeksLive data, approximately 22,000 BTC options will expire today, February 2, and the Put Call Ratio will be 0.66. The Maxpain point is set at $42,000, adding significance to the upcoming expiration of the option with a meaningful value of $960 million.

During a week when the crypto market demonstrated relative stability amid a downward trend in Realized Volatility (RV) and Implied Volatility (IV), a significant development is the introduction of increased capital into the crypto market through Bitcoin spot ETFs, considered a sign of the slowdown in Grayscale’s selling.

There is a calmer activity in terms of block trading, with some whales reducing their positions. This reduction is related to profit-taking strategies based on betting on ETF movements. Looking ahead, market enthusiasts anticipate the next significant development revolving around Bitcoin halving, with speculation gaining momentum around the Bitcoin halving.