As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen more than my fair share of market fluctuations and surprises. However, the current report from Bybit and Block Scholes on the crypto market leading up to the U.S. election has piqued my interest.
The digital currency market, as indicated by Bybit and Block Scholes, appears tranquil ahead of the U.S. election, showing optimistic outlooks even though there’s less immediate volatility.
According to a recent report by Bybit and Block Scholes, as reported on crypto.news, the cryptocurrency market has shown signs of tranquility in the run-up to the U.S. elections. This period has been characterized by reduced short-term volatility, yet a generally optimistic long-term perspective remains intact.
The report suggests that traders are preparing for the upcoming election by taking bullish positions, which indicates a positive outlook, despite a decrease in the predicted short-term market volatility for option contracts.
The level of expected price fluctuation over time, as estimated by traders, is what implied volatility represents. In terms of 7-day options, the report highlighted a significant decrease, indicating reduced expectations for short-term price changes ahead.
Volatility after the election
From my perspective as an analyst, I observe a noticeably steeper slope in the market’s term structure, which translates to heightened volatility for options with longer expiration dates, such as those lasting 14 days. This trend suggests that traders are keenly attuned to the upcoming election and anticipate substantial market fluctuations in its aftermath.
Funding rates, which show the cost of holding positions in futures contracts, remain positive across all tokens, not just Bitcoin (BTC) and Ethereum (ETH).
A common sign of optimism among traders is when funds flow positively, suggesting they believe the market will increase. In the case of Bitcoin, call options (permitting traders to purchase Bitcoin at a specified cost) are primarily driving the open interest, lending additional weight to the bullish perspective.
The report indicates that the market seems stable at present; however, it predicts potential substantial changes following the election. It’s possible that Bitcoin might surpass the $70,000 threshold in November if this forecast holds true.
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2024-10-24 17:05