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(Bloomberg) -- Investors searching for clues as to where Bitcoin is headed next may want to take a look at what the options market is signaling.

The world’s largest cryptocurrency rebounded this week after falling below $40,000 for the first time since September on Monday. The drop put holders on edge. For one, it marked a downturn of roughly 40% from the coin’s record high in November. It also served as a test of what is seen by several technical analysts as a key support level: $40,000. 

Now Bitcoin appears to have stabilized, and options activity suggests investors believe the test of $40,000 is over, and more upside is ahead, according to a team from Genesis Global Trading including Noelle Acheson. 

The skew, or difference in implied volatility of bullish and bearish bets, has recently dropped from double-digits to near zero, and revealed a decrease in investor demand for put options and an increase for call options, Genesis data show.

“That shift in preference may be bullish for the price of BTC, all else equal,” Acheson added. 

A bottom at $40,000 is a view echoed by many analysts in the famously optimistic world of crypto. Martin Gaspar and Katherine Webb at CrossTower said in a Friday note that Bitcoin’s reserve risk, a measure of confidence of long-term BTC holders, is currently lower than it was at the coin’s last bottom in July 2021, and now stands in the “buy” zone, which could give “more weight to the indication that this is a bottom.”

To be sure, Bitcoin remains as volatile as ever and trading could be choppy in an environment where the Federal Reserve is becoming more hawkish, according to Marko Papic, chief strategist at Clocktower Group. Bitcoin’s correlation with the S&P 500 remains at one of its highest readings in the past 12 months. 

In this environment, “you don’t really want to own high-beta risk assets,” he said. “You want to own things that are much more sensitive to value, much more sensitive to global growth and cyclicals, and that’s why I don’t think crypto and Bitcoin are going to really do great over the next three to six months.”

The $40,000 level “has been the key pivot point,” said Bloomberg Intelligence’s Mike McGlone. Up next, $50,000 comes into play before Bitcoin resumes its upward trend toward his forecast of $100,000, he said.

“Demand and adoption are increasing and supply is declining,” McGlone said. “Something has to reverse the increasing Bitcoin adoption trend or the rules of economics point to higher prices. I expect demand and adoption trajectories to remain favorable.”

McGlone isn’t alone in his calls for Bitcoin to more than double from current levels. Jonathan Padilla, co-founder of Snickerdoodle Labs, a blockchain company focused on data privacy, expects Bitcoin to hit that level by the end of 2022, and also said that $40,000 is likely a floor, given the level of institutional capital he expects to flow into the market this year.

“The institutional nature is dramatically different from the primarily retail focus in 2017, 2018,” Padilla said. “That shows the strength of institutional buying and the demand from the long-term perspective.”

David Tawil, president of ProChain Capital, was ready to watch the $38,000 level in this past week’s sell-off. But, he hoped to see U.S. tech stocks start to rebound, which signals to him that “the bottom is in” for Bitcoin, he told Bloomberg’s “QuickTake Stock” broadcast. 

“This is a pretty good buying level, especially if we go ahead and just retrace the losses -- you’re talking about a 50%-plus gain from a year,” Tawil said.