According to Bloomberg, Bitcoin traders are bracing for potential market fluctuations in the wake of the upcoming U.S. election on November 7th. The 30-day implied volatility index for Bitcoin, measured by CF Benchmarks Ltd., has surged to its highest level since the global market downturn in August. This indicates a heightened level of uncertainty among cryptocurrency investors.
Caroline Mauron, co-founder of cryptocurrency derivatives trading firm Orbit Markets, noted that the options market anticipates a post-election volatility of approximately 8%, which is significantly above the typical 2%. Mauron emphasized that after the election, the lack of a significant volatility premium suggests traders expect a swift result. Given the competitive nature of the race, this expectation may be overly optimistic.
Furthermore, a report from Derive.xyz highlighted that in October, the distribution of Bitcoin’s put and call options was balanced, signaling traders are preparing for both upward and downward price movements. Data from Deribit indicates that following the election, Bitcoin’s trading range could potentially fluctuate between $60,000 and $80,000, based on peak open interest.