Bitcoin Traders Brace for 20% Surge Amid Election Turmoil
- Traders expect Bitcoin price swings up to 20% as U.S. election day nears, with increased activity around the $80,000 strike price.
- Over 47% of options are calls, a strategy to collect premiums amid anticipated election-driven volatility.
- Short-term volatility now surpasses long-term trends, signaling sensitivity to immediate political and economic events.
With the U.S. presidential election approaching on November 5, Bitcoin traders are preparing for a volatile period. According to data from DeFi derivatives platform Derive, market analysts expect price swings of up to 20%, highlighting the turbulent climate surrounding this significant political event.
Recent trading data reveals fascinating trends as we gear up for a major financial milestone, said Derive founder Nick Forster in an interview with Local media. As political tensions rise, so does the level of trading activity. Analysts have observed a noticeable concentration of options around the $80,000 strike price, with many traders positioning themselves through short-term call sales. These moves allow them to benefit from heightened option premiums, a strategy designed to navigate the potential for dramatic price movements.
On Monday, Bitcoin briefly climbed past $70,000, marking a level unseen since early June, as CoinGecko reported. The digital asset gained more than 5%, closing in at $71,200. The notable uptick has sparked renewed interest in the $80,000 price mark, with traders seeing it as a potential pivotal point.
The significant sale of calls reflects a deliberate strategy to collect premiums, while the focus on the $80,000 strike suggests this could be a critical juncture for Bitcoin, Forster noted.
Metrics collected over the past 24 hours reveal that 47% of options traded were calls, or bets on a price increase. Traders appear to be seizing juiced premiums made possible by the anticipated election-driven volatility. Forster explained that this trend is a calculated move, indicating that many investors expect short-term price turbulence but remain uncertain about the direction.
Bitcoins Short-Term Volatility Outpaces Long-Term Trends
The upcoming election between Vice President Kamala Harris and former President Donald Trump has amplified short-term volatility, showing a significant rise relative to long-term expectations. This suggests that traders are preparing for potential impacts directly related to election day, with the expectation that market reactions could be swift and pronounced.
In fact, Forster highlighted that options with expirations within the next seven days have seen an increase in volatility, suggesting a high sensitivity to upcoming political and economic news. He added that traders are paying a premium for options as they seek protective measures against unpredictable price swings. This extra cost, known as the volatility risk premium, underscores the prevailing caution as the election nears.
Theres roughly a one in three chance that Bitcoin could see a swing greater than 10% on election day, Forster remarked, adding that a sharper 20% fluctuation has a 5% probability. These metrics reveal that the market is braced for action, with both short- and long-term players actively hedging in preparation for election-driven price movements.
Read more: https://www.tronweekly.com/bitcoin-trader-brace-20-surge-election-turmoil/
Text source: TronWeekly
