The news that Bitcoin (BTC) price is currently trading at $9,400 is music to the ears of traders, owing to the fact that just 24 hours ago, the price was in the region of $8,900.
Although Bitcoin price is moving in an upward trajectory thanks to the fact that traders are purchasing a few put options.
The $9,400 trading price represents a 2% gain on the day. On a weekly basis, the leading cryptocurrency now has more than 8% gains.
Overall, the Bitcoin’s recent surge is quickly followed by a drop in the need for put options. The advent of such derivative contracts means holders have the right to sell specific assets at an already agreed price on or before the specified rate. Mind you, under such derivative contracts, the holder has zero obligation to sell. On the other hand, a call option provides holders with the right to buy.

Image is taken from Skew

According to data from Skew, the one-month put-call Skew is down by 6.6% from a month high of 22%. The one-month put-call helps to measure the price of puts in relation to calls.
The metric dropped by 10% from 15% to 5% on Wednesday, as prices hovered around the $9,000 mark. On the technical charts, this shows a bullish breakout. Simply put, the increase in prices has led to a subsequent decrease in demand for put options.
“The drop in skew can be attributed to a higher risk thanks to the May halving, thus leading to an increased skew,” said Luuk Strijjers, COO at cryptocurrency derivative exchange Deribit. “As things stand now, the market is expecting things to normalize, thus reducing the demand for puts.”
Following the halving, put options attracted a higher demand, thus bringing the one-month Skew higher from 12% to 12%. This was in anticipation of the price pullback experienced by the cryptocurrency in the wake of the halving in 2016.
A 9% correction was observed last week, with prices normalizing at $8,600. Bitcoin held on to levels below $8,700 several times before climbing above $9,000.

The Necessary Dip Demand

Image is taken from Glassnode
As the price valuation of Bitcoin gradually dropped from $10,000 to $8,630, the number of addresses holding a minimum of 100 BTC rose. This showed that the big players in the industry would always seize any opportunity to accumulate.
The price decline saw the number of holding addresses rise from 16,010 to 16,089. Thus, proving investors believe in the long-term promises of the cryptocurrency. In addition, the number of addresses holding between 0.01BTC and 0.1 BTC reached a record high during the price dip

Image is taken from TraderView

4-Hour and Daily Charts
The sharp move above the $9,310, has made the bearish lower highs pattern on the four-hour chart invalid. Mind you, the positive outlook by Wednesday’s falling wedge breakout has been reinforced.
All signs indicate that Bitcoin could rise towards the resistance at $9,875, this will put the cryptocurrency way ahead of the low of $3,867 seen in March.