Massive bitcoin call spreads target $72,000 by month end, right when the Fed meets

Summary

Traders in the bitcoin derivatives market have purchased $2.5 billion in notional value through bull call spreads on Deribit, targeting a bitcoin price of $72,000 by July 31, 2026. This trade involves buying 20,000 contracts of the $70,000 call option while simultaneously selling 20,000 contracts of the $72,000 call option, both expiring at the end of July. Each contract represents one bitcoin, making the total 40,000 contracts. This strategy bets on a moderate rise in bitcoin's price while limiting the upside beyond $72,000.

The timing of these trades is significant because the July 31 expiration date is shortly after the Federal Reserve's interest rate decision on July 29. The market currently expects the Fed to hold rates steady at 3.5%-3.75%, with about a 75%-80% probability. The recent bitcoin price surge from below $58,000 to around $64,800 reinforces traders' confidence in continued upward momentum. According to Jean-David Péquignot, chief commercial officer at Deribit, the size and precision of these options trades suggest institutional involvement rather than retail activity.

Why it matters

This activity matters because it indicates that some large traders see the Fed's decision as a potential catalyst for bitcoin to push toward $72,000. While the easing of inflation fears following June's data has supported market optimism, recent geopolitical tensions affecting oil prices create uncertainty. Despite these risks, the significant options flow demonstrates that major market participants are currently betting on bitcoin price appreciation in the near term.