The likelihood of the bitcoin price surpassing its all-time high of $20,000 by the end of the year is a mere six percent. That’s according to data from Skew which tracks the BTC options market.
Bitcoin has found itself consolidating around the crucial inflection point of $10,000. And while most traders agree that BTC is now poised for a major break, time is running out to claim a new record high by the end of 2019.
Predicting the bitcoin price with options
Bitcoin options are a derivative product used by traders on platforms like LedgerX and Deribit. They allow traders to speculate on the future price of bitcoin. A bitcoin option gives the trader the right, but not an obligation, to buy bitcoin at a certain price, on a certain date in the future.
For example, a trader might buy a ‘call option’ to purchase bitcoin at $20,000 on 31st December 2019. That trade would imply a strong bullish sentiment.
By tracking the open interest on options, Skew has calculated a 6% probability of hitting $20,000 – a new record high – by the end of the year.
BTC: the next big move is coming
Since the bitcoin price hit a yearly high of $14,000 in June, the dominant cryptocurrency has entered a period of consolidation. The price has now converged around the $10k mark and poised to break sharply higher or lower.
“Bitcoin is at a cross-roads, consolidating in an ever tightening range since the $14k top in June. A big move is coming soon and provides an excellent opportunity for traders to profit following the direction of the next break” – Crypto trader and analyst.
Most analysts remain long-term bullish, but there’s always the chance BTC breaks downwards. In that case, as trader Josh Rager explains, there is plenty of support around the $8,000 mark.
Analyst Murad Mahmudov is more optimistic. He sees a “steady ascent” coming as the bitcoin price completes its consolidation.
Bitcoin price fundamentals
Of course, technical analysis is just one part of the puzzle. There are a number of major fundamentals on the horizon.
Most important of which is Bakkt – the much-hyped, physically-settled bitcoin futures platform operated by the NYSE parent company. Many believe that Bakkt will act as a catalyst for institutional investment when it launches on September 23rd. However, it may also have the opposite effect if there’s little demand (or strong short demand).
The Securities and Exchange Commission (SEC) will also decide the fate of two exchange-traded funds (ETFs) in October, though the chance of approval is close to zero.
Click here for a real-time bitcoin price chart.