With less than 24 hours to go for U.S. Presidential elections, crypto markets are bracing for a major “unexpected” impact as Bitcoin’s value is predicted to swing by $8000 amid a highly volatile market scenario.
Over the past 10 days, Bitcoin has reached an all time high and then slumped behind $70,000 over the last weekend, with its current price at $68,540. Analysts predict that a closely contested U.S. elections has set the dice on the table, with equal potentials to either make or break the crypto markets.
Amberdata’s Director of Derivatives, Greg Magadini,, calculated movement at a potential +1.5 sigma level yielding $6,000 to $8,000. This is based on October 6 Deribits option trading, with 112% of forward volatility moving towards $4,000, a shift in either direction over the years.
These figures have also been matched with active polling in seven crucial swing states, where Donald Trump is edged above his rival Kamala Harris. The numbers are so close that betting markets claim a 50% chance that the outcome could go anyway during that time, which prevents them from pricing it prior and thereby creates low volatility.
A further forecast shows that elections are a wake-up call for traders, in essence sending a clearer direction, as the election results will come out by Friday following the election on Tuesday.
Options traders are betting on volatility and buying calls on Deribit and the Chicago Mercantile Exchange at $70,000, $85,000, and $90,000 strikes. Joshua Lim of Arbelos Markets mentions that the price of calls has risen above that of puts, which means that there is bullish sentiment in the options market even if the underlying price moved down recently.
The volatility curve projects a move of about 7%- 8% surrounding the major events of this week, which include Thursday’s Federal Reserve rate decision and Friday’s announcement of the election results, which were supposed to happen earlier in the week.
At the same time, Ethereum (ETH) traders are bracing themselves for the worst when it comes to volatility. According to Derive, there is a 68% chance that ETH will move between 9.35% and 10.19%, while Bitcoin is predicted to move between 8.97% and 9.85%. If this is achieved using the current rates, this would imply movements of $247 for ETH and $6,800 for BTC, respectively.
According to Nick Forster, Derive’s founder, these numbers are very important for active traders in an environment characterized by uncertainty. A shift toward more complex on-chain options trading strategies indicates that traders are gearing up to either protect themselves from volatility or bet on it.
Also Read: As BTC price Keeps Falling, Kamala takes Gains on Polymarket
