Cryptocurrency Market Update: Bitcoin's Price Stagnation Impacts Long-Term Options

According to Omkar Godbole, the price of an asset is often considered the best indicator of its appeal. However, the price of bitcoin, the largest cryptocurrency, has remained stagnant for over 50 days, trading without direction above $100,000, which has disappointed bulls. This lack of movement has unusually led to a decrease in the call bias in long-term options. Risk reversals from options listed on Deribit that expire in June next year are nearly zero, indicating that calls and puts are trading at similar levels. Historically, long-term risk reversals have tended to be positive, indicating a bias towards calls. Greg Magadini, director of derivatives at Amberdata, stated that this risk reversal could easily become negative as bitcoin continues to experience downside volatility. Continued institutional structural flows, such as selling calls and buying protective puts, can also contribute to a negative risk reversal in the long term. Analysts have noted that consistent purchases by companies like MicroStrategy are failing to offset the general decline in spot demand for bitcoin. Blockchain analysis has recently shown that long-term holding wallets are taking profits. Some traders are focusing on next Tuesday's US consumer price data after a decline in July Fed rate-cut odds following Friday's jobs report. Meanwhile, pop culture and politics have intersected with crypto, as rapper Drake mentioned bitcoin in his latest track and Elon Musk announced the formation of the America Party, which he said would support bitcoin. Mena Theodorou, co-founder of crypto exchange Coinstash, stated that these celebrity endorsements are indicators of the growing cultural relevance of crypto and can contribute to investor confidence over time. In other news, Ethereum co-founder Vitalik and researcher Toni Wahrstätter proposed EIP-7983 to set a new gas limit for transactions on the blockchain, aimed at making it more resilient to denial-of-service attacks and improving stability. Russia has introduced a national registry for cryptocurrency mining equipment to standardize its use and enhance compliance with regulations. In traditional markets, oil prices dropped early Monday due to increased production by OPEC but later recovered due to a tight physical oil market.