• Crypto & Funx
• 07 Nov, 2024

Analysts observe a significant rise in implied volatility for Bitcoin and Ethereum options set to expire near the November 8 election.

This indicates crypto's sensitivity to broader macro events, though most investors remain cautious, keeping October's volatility relatively stable.

The Bitcoin put-call ratio of 0.66 and Ethereum’s 0.97 reflect cautiously bullish sentiment overall.

After facing some selling pressure to $65,500 earlier this week, Bitcoin price is seeing partial recovery to $68,000 today ahead of the Friday options expiry. A total of $4.5 billion worth of Bitcoin options will be expiring today as per the data from the derivatives platform Deribit.

As per the details, a total of 62,657 Bitcoin options contracts will expire today, October 25, with a maximum pain point of $64,000 and a put-call ratio of 0.66.

Photo: Deribit

With BTC price staying above its maximum pain point, options expiring at this stage could lead to losses for the option holders. Also, the put-call ratio is a key sentiment indicator. A ratio below 1 usually reflects bullish sentiment, as more investors anticipate market gains. Conversely, a ratio above 1 tends to indicate bearish sentiment, suggesting concerns about a potential market downturn.

The interesting thing to see is that the volume of Bitcoin options expiry has surged to $4.5 billion this week. In the previous weeks this month, the options expiry volume was at an average of $1.5 billion.

Analysts at BloFin Academy note a significant shift in implied volatility (IV) as the US elections approach. They :

“The change in implied volatility first reflects the election’s impact on the expected volatility of the crypto market. Whether it is BTC or ETH options, the implied volatility level of options expiring on November 8 has increased significantly and exceeded that of far-month options”.

“The change in implied volatility first reflects the election’s impact on the expected volatility of the crypto market. Whether it is BTC or ETH options, the implied volatility level of options expiring on November 8 has increased significantly and exceeded that of far-month options”.

They attribute the shift in implied volatility (IV) to investors’ hedging and speculative needs. Analysts also note a particularly sharp rise in BTC’s “election day option”, highlighting Bitcoin’s sensitivity to macro events. For now, though, most investors are staying on the sidelines, suggesting that October’s volatility may remain limited.

A Look into Ethereum Options Expiry

Along with Bitcoin, a total of 403,426 Ethereum options contracts worth $1.01 billion will expire today with a max pain point of $2,600 and a put-call ratio of 0.97. This shows that there’s a tough fight currently between the ETH bulls and bears.

Photo: Deribit

The Ethereum price movement has been testing investors’ patience for a while with spot Ethereum ETFs also not seeing a good pick up, unlike their Bitcoin counterparts. The Ethereum price has been trading around $2,515 levels at press time with no clear indication of the next directional move.

Probably, ‘s presidency can trigger an altcoin market rally thereby pushing to more than $3,000 levels.