Crypto Markets Brace for US Elections Volatility as Bitcoin Eyes $8,000 Swing

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As a seasoned crypto investor with over a decade of experience in navigating market volatility, I must admit that this upcoming U.S. Presidential election has me on edge. The unpredictable nature of political events and their impact on the crypto markets is nothing new to me, but the close race between Trump and Harris has amplified the uncertainty.

As the U.S. Presidential election nears within just 24 hours, cryptocurrency markets are preparing for a significant and potentially unforeseen influence on Bitcoin‘s worth. Analysts foresee that Bitcoin’s value may fluctuate by around $8000 due to an extremely volatile market situation.

Over the last 10 days, Bitcoin hit a record peak and subsequently dropped below $70,000 during the weekend, now standing at $68,540. Analysts are suggesting that the upcoming closely fought U.S. election could either boost or negatively impact the crypto market, as its outcome remains uncertain.

According to Greg Magadini, Amberdata’s Director of Derivatives, the projected movement falls within a potential range of +1.5 standard deviations, which could result in earnings between $6,000 and $8,000. This estimation is derived from October 6th Deribits option trading and takes into account an increased volatility of 112% compared to the forward volatility, with potential shifts worth approximately $4,000 in either direction over time.

In addition to being compared with ongoing polling in seven key battleground states, Donald Trump is leading Kamala Harris slightly, according to these statistics. The numbers are so tight that betting markets suggest a 50% probability of an unpredictable result, thus hindering them from setting prices ahead of time and causing minimal market volatility.

An upcoming prediction indicates that elections serve as a warning bell for traders, providing them with a more definite path forward since the election outcomes will be revealed by Friday, following the election day on Tuesday.

As a researcher studying the options market, I’ve noticed an interesting trend: Traders are placing bets on potential volatility by purchasing call options for Bitcoin at Deribit and the Chicago Mercantile Exchange, with strike prices set at $70,000, $85,000, and $90,000. This intriguing observation is supported by Joshua Lim of Arbelos Markets, who points out that the price of these call options has surpassed that of put options. This disparity suggests a strong bullish sentiment among traders, despite recent downturns in the underlying Bitcoin price.

This week’s significant occurrences – the Federal Reserve’s interest rate decision on Thursday and the election results announcement on Friday (originally planned for earlier in the week) – are expected to cause fluctuations of approximately 7%-8% in the market, as indicated by the volatility chart.

Simultaneously, Ethereum (ETH) investors are preparing for potential volatility as they anticipate its fluctuations. As suggested by Derive, there’s approximately a 68% likelihood that ETH will experience a range of approximately 9.35% to 10.19%. On the other hand, Bitcoin is expected to move within a band of 8.97% to 9.85%. Translating these figures with current rates in mind, this would result in potential price swings of around $247 for ETH and roughly $6,800 for BTC.

As per Nick Forster, the founder of Derive, these figures play a crucial role for active traders operating in an unpredictable market scenario. The increasing trend towards intricate on-chain options trading tactics suggests that traders are preparing either to safeguard against market turbulence or take advantage of it.

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2024-11-04 14:12