Bitcoin prices may not have hit rock bottom yet, says Cboe options expert

Coming off the best week for digital currencies since late July, bitcoin, the world’s No. 1 digital currency, was trading marginally lower on Monday.

In midafternoon action, a single bitcoin BTCUSD, -3.48% was changing hands at $6,627.68, down 0.7% since Sunday at 5 p.m. Eastern Time on the Kraken exchange, and off a late-Friday high of $6,808.

Crypto bulls are riding high after to total market value of cryptocurrencies has risen by more than $20 billion over the past seven sessions, perhaps, signaling a halt in a monthslong bitcoin bear market, which has the price of the digital currency down more than 50% in 2018.

Most notably former Fortress Investment Group fund manager Mike Novogratz, who told CNBC Friday that “the sky is the limit,” adding that it’s impossible for bitcoin not to reach $8,800-$10,000 by the end of the year.

However, Kevin Davitt, a senior instructor at The Options Institute at Cboe Global Markets has called for caution, warning investors this isn’t the first rally of the year. “Perhaps this is the beginning of a meaningful move higher for the cryptos after months of pressure. Only time will tell if this rally has legs,” wrote Davitt in a newsletter Monday.

“There have been at least 5 significant moves higher (in percentage terms) for bitcoin since the decline began in earnest in early January. While cryptos may be moving with relatively muted volatility in the short term, there’s no guarantee that will continue.”

In futures trading, the Cboe Global Markets Group Inc.’s October contract XBTV8, -3.48% finished trading down 1.7% at $6,610 and the CME Group Inc. September contract BTCU8, -3.40% closed down 1.9% at $6,610.