Massive bitcoin call spreads target $72,000 by month end, right when the Fed meets
Institutional traders are placing large bets on Bitcoin reaching $72,000 by the end of July through bull call spreads. This activity aligns with the upcoming Federal Reserve interest rate decision, suggesting investors view the meeting as a potential market catalyst.
Why it matters
Large-scale options trading indicates institutional confidence in cryptocurrency price volatility and sensitivity to macroeconomic policy shifts.
Bitcoin BTC $ 64,128.55 traders are betting billions that the cryptocurrency's spot price will climb to $72,000 by the month’s end, a timeline that lines up with the July Federal Reserve meeting.
They have done so this week with the help of Deribit-listed bitcoin call options, or derivative contracts that pay off when BTC's spot price surges beyond specific price levels by a certain date.
According to Deribit, a total of 20,000 contracts of the $70,000 call expiring July 31 were purchased alongside a sale of 20,000 contracts of the $72,000 call of the same expiry. That amounts to $2.5 billion in notional value, the dollar value of 40,000 contracts, each representing 1 bitcoin.
This is known as a bull call spread, a strategy initiated when expecting a moderate rise in the price of the underlying asset.
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