The price of Bitcoin and Ethereum increased overnight across the world ahead of this month’s presidential election in the United States.
A rise in volatility means traders have a two-in-three chance of seeing swings of nearly 10% in the price of Bitcoin and Ethereum following Tuesday’s election, according to an analysis by Nick Forster, founder of DeFi options protocol Derive XYZ.
Forward volatility for BTC and ETH +0.87% spiked overnight with Bitcoin’s volatility now sitting at 80.30%, up from 72.20%, and Ethereum’s at 82.92%, up from 75.40%.
“This escalation reflects traders are bracing for the election results, which could sway market prices substantially,” Forster wrote.
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He projected a two-in-three likelihood that election night would lead to big swings in price.
The analyst added: “There’s a 68% chance we’ll see movements ranging between -8.97% and +9.85% for BTC, and slightly wider swings for ETH, from -9.25% to +10.19%.
“With the highest volatility brackets, we’re also calculating a 5% probability of BTC and ETH experiencing even more extreme movements beyond -17.14% to +20.68% for BTC and -17.64% to +21.42% for ETH.
“The 7-day ATM implied volatility for BTC has risen by 2% in the last 24 hours, now at 70.59%, while the 30-day IV remains steady. Meanwhile, the 30-day skew has increased to 8%, as calls are priced higher than puts.
“Total call open interest for BTC stands at 1,179 compared to 885 puts, clearly signaling the market’s bullish inclination despite potential volatility.
“As the election nears, these figures are crucial for traders looking to navigate the heightened uncertainty in the crypto markets. It’s a pivotal moment for onchain options trading, demonstrating the sophisticated strategies traders are employing to hedge against or capitalize on expected volatility.”
By: Babajide Okeowo
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