Crypto News

The Bitcoin market is waiting for the end of the week volatility

Market makers of options, based on their tools and metrics did not predict bullish season after halving, and as it turned out, was not mistaken. Bitcoin failed in may to garner the necessary support from customers, and to overcome the psychological level of $ 10,000.

According to Skew the realized volatility on the Bitcoin market fell to three-month low, dropping below in March.

Source: Skew

At that time, expected volatility (implied volatility), which are used by the traders to compare different options and choose trades, got good support. Implied volatility is not related to historical data, and obtained by inverse calculations from a model based on option pricing, gave a bullish Outlook for the future.

At the same time, the realized volatility is based on historical price movement of Bitcoin, not have any impact on the volatility of the BTC in may.

Graph of the term structure of volatility [VTM] presented asymmetric markets based on price contracts Bitcoin options suggests that will soon come to the market peak price fluctuations. According to the schedule, peak rates can be by the end of 2020.

Source: Skew

At this time, the volume of option contracts has increased 10 times, which had never been in the cryptocurrency market.

Source: Skew

In addition, this Friday is about to expire futures contracts on the CME. Futures traders see little motivation to extend the contracts, and will either pay or do the transfer in June. If traders CME decides to pay a massive price movement.

As on all contract markets of the CME Group recorded the huge open interest in Bitcoin (which was not observed from 2019), the upcoming volatility could lead to serious consequences for the entire cryptocurrency market.

In fact, traders have hedged against activity, which is marked by the end of the month, ie the current week.


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