Analysis: For the third consecutive year, we have observed an unusually high "Alpha" flow in short-term Bitcoin call options for the week of January 10th

Cryptocurrency derivatives trader Gordon Grant emphasized the importance of Bitcoin's recent breakthrough and mentioned derivative indicators.

Grant said, "We have seen for the third consecutive year an unusually high 'alpha' flow in short-term bullish Bitcoin options during the week of January 10." He pointed out that over 1,000 bullish options dated January 7 were traded at an execution price of $103,000 last weekend. Grant compared this to the situation in early 2023 when similar activity in short-term call options preceded a dramatic rise in Bitcoin, thanks to volatility being rapidly repriced from 20% to over 60%.

He also noted that a large amount of bullish option activity prior to BlackRock IBIT's launch on January 10th, 2024 stimulated Bitcoin's rise from $40,000 to $48,000.

He further stated that the term structure of options shows a date premium after Trump's inauguration ceremony which may reflect traders pricing potential market volatility events or gamma-driven positioning. The key question now is whether this marks the start of a continued rise for Bitcoin into 2025 or if it is just short-term excitement triggered by speculative betting on another event related to Trump - similar to last July’s Nashville event involving Bitcoin.

"The term structure of volatility and skew seems to suggest that investors are seeking long-term returns this year not just from first-week gains," said Grant. (The Block)