U.S. Election Sparks Bitcoin Volatility: Traders Eye $80,000 Target!

As the U.S. election approaches on November 5, Bitcoin traders are preparing for increased market volatility, with projected price swings reaching as high as 20%. According to data from DeFi derivatives platform Derive, the current trading landscape reveals intriguing insights into market dynamics surrounding significant financial events.

Key Insights

• A high concentration of bets is forming around an $80,000 Bitcoin strike price, with a notable presence of short-term call sales. This indicates traders are utilizing option premiums to brace for potential price movements.
• Bitcoin has recently surged past $70,000, reaching $71,200—a level not seen since early June, as reported by CoinGecko.
• The predominance of calls being sold suggests a strategic approach by traders, focusing on premium collection while eyeing the $80,000 mark as a potential turning point for Bitcoin.

In the last 24 hours, over 47% of options sold were calls, reflecting traders’ intent to capitalize on inflated premiums due to the election-related volatility. The volatility patterns indicate an expectation of bumpy rides ahead, with uncertainty about the price direction.

Election Impact on Bitcoin

With the U.S. presidential election pitting Vice President Kamala Harris against former President Donald Trump, the stakes are high. Trump has indicated a potential for more focused policies on crypto, which could directly influence market sentiment.

Short-term volatility is currently outpacing long-term volatility, with an expected spike around election week. Traders are betting on immediate impacts on Bitcoin's price, anticipating sharp swings as events unfold. The data suggests a one in three chance that Bitcoin could experience swings greater than 10% on election day, with a 5% likelihood of a 20% movement. This reflects the potential for significant price action tied to the election results.

Protective Moves

Traders are also paying a premium for options, indicating protective hedging strategies as the election draws nearer. This volatility risk premium signifies traders' expectations of larger price shifts and their willingness to invest in risk management.

Stay informed and prepare for what could be a historic week for Bitcoin as the election unfolds!