Top 5 cryptocurrencies to watch this week: BTC, ETH, LTC, ADA, BNB

When the price of an asset hits a new all-time high, momentum traders plow in as they sense an opportunity to ride the trade higher. The same was seen after Bitcoin (BTC) price broke above the $20,000 mark on Dec. 16. By Dec. 19, the price had hit an intraday high at $24,197.46, a 21% rally in four days.

These sharp moves in Bitcoin price attract traders who use derivatives to try and amplify their gains or hedge their existing positions by buying downside protection. This resulted in the open interest on Bitcoin options hitting a new all-time high at $6.5 billion earlier this week.

Crypto market data daily view. Source: Coin360

While professional traders use complicated options strategies to establish their positions, the retail traders generally buy naked options with a dream of earning a windfall on the options contract. This can be seen from the high open interest on the $36,000 strike price and the $52,000 call option.

For every option contract, there is a seller and a buyer and generally, professional traders prefer to sell the option contracts and pocket the premium when the expiry is worthless. Therefore, retail traders should make informed decisions before buying naked options contracts.

The bullish momentum on Bitcoin has pulled select altcoins higher. Let’s look at the charts of top-5 cryptocurrencies that could offer trading opportunities in the coming week.