On January 20th, Bitcoin surpassed a significant milestone, reaching an unprecedented high of over $109,000. This surge is accompanied by notable spikes in both implied volatility and realized volatility, marking their highest levels since August 2024. According to CoinDesk market analyst Omkar Godbole, the persistent positive correlation between Bitcoin’s price and its implied volatility suggests that traders are increasingly interested in options trading—particularly in call options. This trend is reflected in the elevated risk reversal, highlighting the premium associated with call options compared to put options, which typically serve as a hedge against downside risk.
Market dynamics are further complicated by political factors, as observed by GCR trader Mitch Galer. He notes that the influence of social media, particularly from high-profile figures like former President Donald Trump, adds an element of uncertainty to the market’s trajectory. Speculation surrounding strategic cryptocurrency reserves and potential regulatory easing has instilled a sense of optimism among investors, fueling expectations of continued growth in the cryptocurrency market as the year progresses.