Market Analysis: Leveraged MicroStrategy Markets Showcase Risk-On Like Never Before
The cryptocurrency market is experiencing a thrilling ride, with bitcoin (BTC) aiming for a six-digit price. Traders are adding leverage on top of an already leveraged MSTR ETF, signaling heightened risk appetite and a build-up of speculative excesses.
Key Findings:
- Options tied to Defiance’s 2X long MicroStrategy ETF (MSTX) exhibit extreme bullish positioning.
- The leveraged ETF is designed to two times or 200% of the daily performance of MSTR’s share price.
- Trading volumes in options tied to the ETF have blown up, with market participants piling into the deep out-of-the-money (OTM) higher strike call option at $230.
- The demand for the $230 strike call was spread across multiple expiries, including contracts set to settle on June 20, 2025.
- The extreme bullish sentiment is consistent with the MSTR options market, where calls recently traded at a record premium relative to puts.
- Similar uber bullish flows have been crossing the tape on the CME, Deribit, and the nascent options tied to BlackRock’s spot bitcoin ETF.
Market Sentiment:
The crypto market right now is like a roller coaster racing ahead and then adding a few extra loops for good measure, pushing the thrill and risk to new heights.
Regulatory Environment:
Expectations for a friendlier regulatory approach under President-elect Donald Trump and Fed rate cuts are driving BTC higher. The leading cryptocurrency by market value has set new lifetime highs above $97,000 early Thursday, taking the month-to-date gain to 38%.
MicroStrategy’s Position:
MSTR is the world’s largest public-listed BTC holder with a coin stash of 331,200 ($3.04 billion) steadily accumulated since 2020.
Conclusion:
The market is experiencing a frenzy, with traders adding leverage on top of an already leveraged MSTR ETF. The extreme bullish sentiment is consistent with the MSTR options market, and similar uber bullish flows have been crossing the tape on other platforms. This could lead to market corrections in the future.
Prediction:
Based on the current market trends and sentiment, it is likely that the crypto market will continue to experience a roller coaster ride, with BTC aiming for a six-digit price. However, this could lead to market corrections in the future.
Recommendation:
Investors should be cautious and consider diversifying their portfolios to mitigate potential risks. It is also essential to monitor market trends and sentiment to make informed investment decisions.
Disclaimer:
This article is for informational purposes only and should not be considered as investment advice. It’s essential to consult with a financial advisor before making any investment decisions.
Sources:
- CoinDesk: Leveraged MicroStrategy Markets Showcase Risk-On Like Never Before as Bitcoin Aims for Six-Digit Price
- ConvexValue: MSTX’s options volume profile
- Market Chameleon: MSTR options market
- CoinDesk: Bitcoin Breaks $64K While Gold Soars
- CoinDesk: ETH/BTC Ratio Slid to Lowest Since April 2021
- CoinDesk: Is Bitcoin Losing Its Bullish Momentum?
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