Bitcoin's 25-delta one-month call-put skew, which assesses the relative price of calls versus puts expiring in four weeks, has risen above 10%, reaching the highest since April 2021, according to data tracked by Amberdata. In other words, demand for calls or bullish bets is outpacing puts, offering downside protection.

With spot ETF optimism driving BTC above $36,800 on Thursday, investors have likely stopped selling calls above the cryptocurrency's spot price, a popular strategy to generate additional yield on top of coin holdings.

Meanwhile, speculators could be buying call options to have leveraged upside exposure. Longer duration call-put skews also show a bias for continued BTC strength over two, three, and six months.

Long call (buy call option) trades account for 44% of the total activity on the leading exchange Deribit in the past 24 hours. (Amberdata)

A call option gives the purchaser the right but not the obligation to purchase the underlying asset at a predetermined price on or before a specific date. A call buyer is implicitly bullish on the market. A put option gives the right to sell.

Traders have been scrambling to buy call options for the past few weeks, leaving market makers with a significant amount of net short exposure above $36,000. With prices above the said level, market makers will likely buy the cryptocurrency to adjust their net exposure back to market-neutral, inadvertently accelerating the rally.

Bitcoin Options Derivatives Markets

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.