As Binance's native token, BNB, climbs towards its historical peak, reaching $663 and closing in on its all-time high by less than 10%, the recent introduction of the Telegram-based gaming token, notcoin (NOT), seems to be amplifying its momentum.
Market participants, however, are exhibiting some caution even amidst the bullish trend. This is evident in the options market, where traders are actively buying put options with strike prices between $550 and $650. This suggests they anticipate potential volatility despite BNB's strong performance. Despite the bullish trend fueled by NOT’s launch and the upcoming Binance Smart Chain update promising lower fees and faster transactions, market participants are exhibiting some caution. This is evident in the options market, where traders are actively buying put options with strike prices between $550 and $650. This cautious hedging suggests they anticipate potential volatility despite BNB's strong performance. As a result, investors in BNB and NOT are facing a dynamic market environment with a mix of positive momentum and the possibility of price swings.
BNB's recent gains are largely attributed to high user engagement with Binance Launchpad and Launchpool projects, which allow users to buy and stake BNB to acquire newly launched tokens like NOT. The token's trading volume has reached nearly $3 billion in the past 24 hours, reflecting the surge in activity.
Despite the positive sentiment and high trading volume, options traders are hedging their bets by purchasing puts. According to Bernd Sischka, chief commercial officer of PowerTrade, over 11,250 BNB options were traded, with put strike prices ranging from $550 to $650 and call strike prices between $600 and $700. This activity suggests traders are anticipating significant price fluctuations as BNB approaches its 2024 peak.
Options are financial contracts granting the buyer the right, but not the obligation, to buy or sell an asset at a specific price by a certain date. Buying call options reflects a bullish outlook, while put options indicate a bearish tone. Notably, if BNB's price continues to climb or remains stable, many of the currently purchased puts will expire worthless.
