BTC Analysis Using Options Flow

The possibilities of predicting the price movement of Bitcoin using Put/Call options.

Image Credit: CoinOptionsTrack

In my opinion, the options flow directly reflects the traders/investors sentiment in the Bitcoin markets, so some attention should be paid to studying the put/call options flow on Bitcoin to predict price action at least approximately.

This analysis is based solely on my trading experience and observations, i.e., assuming my understanding of options flow. Of course, the models described below work most of the time, but not always, as any model has a deviation (exception)👇

The first component of the Bitcoin price prediction model is the definition of the Put/Call options ratio (PCR).

• The value of the PCR 0.60 and below — means excessive optimism, which one way or another can lead to a bearish correction of a particular force. Why? Since 40% or more of the call options were traded on the Bitcoin markets, i.e., people unreasonably bet on growth, leading to bearish market turbulence.
• The value of the PCR 1.40 and above — means excessive fear (panic), which in one way or another affects the fact that a recovery of the exchange rate is likely to follow, i.e., there will be a…