decrypt.co
“The latest trading analysis reveals some compelling insights into market dynamics as we approach significant financial events,” Derive founder Nick Forster told Decrypt on Monday.
The data shows a high concentration of bets around an $80,000 Bitcoin strike price and a strong presence of short-term call sales, as traders use option premiums to prepare for possible price movements.
Bitcoin briefly broke above $70,000 on Monday, hitting a level last seen in early June, before easing back down, according to CoinGecko.
“The overwhelming dominance of calls being sold suggests a strategic premium collection by traders, while the focus around the $80,000 strike highlights a potential pivotal point for Bitcoin,” Forster said.
In the last 24 hours, over 47% of options sold were calls, or bets on a price increase, with traders seeking to capitalize on “juiced premiums” due to election-related volatility, Forster explained.
Volatility patterns across different expiration dates show traders are preparing for a bumpy ride ahead of next weeks but remain unsure about which direction prices might take.
Americans will head to the polls to vote in the tightly contested U.S. presidential election between Vice President Kamala Harris and former President Donald Trump. Trump has, so far, promised more precise policy targeting crypto.
Short-term volatility, reflecting expected price movements, is now outpacing long-term volatility, with a noticeable spike expected around election week, Forster added.
That indicates traders are betting the U.S. election could trigger immediate effects on Bitcoin’s price, potentially causing sharp swings as events unfold.
The trend is underscored by a rise in volatility for options set to expire within seven days, signaling heightened sensitivity to upcoming economic and political news.
"There's a one in three chance that BTC could see a swing greater than 10% on election day, with a more volatile scenario of 20% movement sitting at a 5% likelihood, Forster said. These figures indicate the potential for substantial price action tied to election results.”
Forster also mentioned that traders are paying more for options, signaling protective moves, or “hedging,” as the election approaches. This added cost, known as the volatility risk premium, shows traders anticipate larger price shifts and are willing to pay to manage their risk.