- Deribit’s data reveals a preference for call options as Bitcoin volatility around the November 5th elections influences trader expectations.
- The presence of call options at higher premiums suggests market participants favor potential gains over hedging against declines.
In anticipation of the U.S. presidential elections on November 5, the focus within the cryptocurrency sector, particularly among options traders, is sharply on Bitcoin’s potential price movements. Market data indicates a consensus among traders that Bitcoin might surge to $80,000 by the end of November, a forecast seemingly unlinked to the election’s outcome.
Options market analysis from Deribit, the leading derivatives exchange, shows a predominant lean towards call options expiring around November 5. This trend suggests a strong market expectation for Bitcoin’s price to rise. David Lawant from FalconX explained to Bloomberg that market sentiment is bullish, expecting Bitcoin to perform well post-election regardless of the result. The surge in call options, particularly those targeting a strike price of $80,000 by November 29, underscores this optimism.
“I think the market consensus is that bitcoin is likely to perform well regardless of the election outcome. Our analysis shows that options activity around the upcoming election exhibits a notable bias to the upside.”
Options are shaping Bitcoin’s price as they allow speculation on its future value without direct ownership, influencing market expectations through mechanisms such as call options, which can increase demand and thus price. Implied volatility and open interest contribute further by enhancing market liquidity and fostering speculation.
Jake Ostrovskis of Wintermute pointed out that the higher premiums on call options suggest a stronger interest in capital gains rather than defensive positioning against price drops. Yev Feldman from SwapGlobal noted that trading strategies are being adjusted for potential price breakouts at both high and low ends. The minimal expectation of a price drop post-election makes a price surge appear more likely.
The broader political context also affects the cryptomarket, with cryptocurrency positions of presidential candidates influencing investor sentiment. Donald Trump’s pro-cryptocurrency stance and Kamala Harris’s promises of favorable regulation show divergent potential impacts on the market.
The role of options in Bitcoin’s pricing is important, especially as the end of the year approaches, with a predominant preference for call options. This trend was evident when the recent expiry of 11,000 BTC options pushed the price towards $70,000, indicating stronger buying pressure.
The recent U.S. Securities and Exchange Commission (SEC) approval for options trading on Bitcoin ETFs, including those offered by BlackRock, marks a regulatory milestone. This approval not only facilitates risk management and speculative opportunities in a regulated environment but also draws greater liquidity to the market, crucial for attracting institutional investors and enhancing the market’s maturity.
The current price of Bitcoin (BTC) is approximately $68,008, with an increase of +2.11%. Bitcoin has experienced selling pressure, pushing it down from recent highs. Key support is around $64,000, while resistance remains near $68,000.
