Bitcoin traders are scrambling for volatility as the US election approaches on November 5, with prices expected to rise by as much as 20%, according to data from DeFi derivatives platform Derive.
“Recent market analysis reveals some compelling insights into market dynamics as we approach some significant financial events,” Deriv founder Nick Forster told Decrypt on Monday.
The data shows a high betting pool of around 80,000 dollars Bitcoin The existence of strikes and short-term call sales as traders use option premiums to prepare for possible price movements.
Bitcoin was broken briefly above 70,000 dollars According to CoinGecko, it hit the level last seen in early June. The asset rose more than 5% on the day to $71,200.
“The overwhelming dominance of calls over selling shows that strategic premium collection is being achieved by traders, while the focus around the $80,000 strike represents a tipping point for Bitcoin,” Forster said.
More than 47% of options sold in the past 24 hours were calls or bets on a rise in price, with traders looking to earn a “juicy premium” due to options-related volatility, according to Forrester.
Volatility patterns across various expiration dates show traders are gearing up for a rough ride ahead in the coming weeks, but remain uncertain about which direction prices will head.
Americans head to the polls to vote in the presidential election between US Vice President Kamala Harris and former President Donald Trump. Trump has so far promised the right policy targeting crypto.
Short-term volatility, which reflects expected price movements, now exceeds longer-term volatility, with a significant increase expected around election week, Forrester added.
That suggests traders are betting on the US election to have an immediate impact on Bitcoin's price, potentially causing sharp swings as events unfold.
The trend is emphasized by the increased volatility of options expiring in the seven-day period, indicating greater exposure to further economic and political news.
“There is a one in three chance that BTC will see a swing of more than 10% on election day, with a more volatile 20% move sitting at a 5% chance,” said Forster, adding that these figures indicate the possibility of significant price action linked to the election results.
Forrester noted that traders are paying more for options, which refer to hedges or “hedging” as the election approaches. This additional cost, known as the volatility risk premium, indicates that traders expect large price swings and are willing to pay to manage their risk.
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