Bitcoin Price Volatility Surges Ahead of US Election with $80,000 in Sight

With the forthcoming event of the presidential election in the United States, Bitcoin price options traders prepare for drastic fluctuations in the market. Data from derivatives platform Derive reveals that there was a large amount of option contracts being placed with an $80,000 bet on the price of Bitcoin and volatility range of up to 20% before the election on November 5th.

Founder of Derive Nick Forster said, “The latest trading analysis provides eye-opening information about the market in anticipation of important exchange events.” This election noise has impacted both short-term and long-term volatilities which traders base their strategies in making geological bets on the Bitcoin price fluctuations.

Hysteria During Elections Fills the Need for Bitcoin Price Trading Instruments

Bitcoin price rose above $70,000 last weekend and reached its high of $71,200 on Monday, CoinGecko reveals, a level not seen since late May. This, in turn, has helped spur increased sentiment among investors, especially because new Bitcoin ETFs attracted nearly $1 billion of new assets last week, according to European asset manager CoinShares.

Such optimism seems to be associated with a very stiff election contest between the now out of power President, Donald Trump and the current Vice President Kamala Harris. Some of the key reasons that the leading cryptocurrencies have received a boost in their market value are associated with Trump and his policies, and his promises to improve the existing policies and legislation regarding cryptocurrencies.

To sum up, Forster shares that “The fact that so many calls are being sold indicates that traders are likely using a price collection strategy” and, around the $80,000 strike, there may be a turning point for Bitcoin.

Economic progress and these new ETFs have pumped Bitcoin investors’ optimism because they provide increased entrance to cryptocurrency markets. The increased demand can possibly be the reason that will ensure Bitcoin continues to rise as people prepare for the election results.

High Stakes in Short-Term Trading Activity

There is a very sharp, almost horizontal action in the options market. The ratio of options traded within the last 24 hours is over 47% of call options. As Forster puts it, traders are looking to make a profit out of ‘”locked-in premiums’ that are hoped to be caused by-elections. However, it is not only positive sentiment that affects the market – general short-term volatility has become higher than long-term volatility due to uncertainty of the election.

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Forster said that reflecting these short-term trading strategies means a ‘higher degree of expectation about future political and economic events,’ and that many of those investing in options contracts are willing to pay a premium for the same. This protective strategy Popularly known as hedging shows that even enthusiastic traders have insured themselves in the event that Bitcoin price could be volatile depending on the forthcoming election.

Forster pointed out that staking, reaching more than a 10% change, has a one in three probability of happening on the election day, while there is only 5% shot of a 20-percent Bitcoin price change. These kinds of projections show simply how volatile the market is at predicting the sudden and drastic shift in the price but not the direction of it.

Election Day Volatility as Investors Hedge Bets

Bitcoin price has demonstrated considerable sensitivity to major occurrences in the past and that has not changed this current election year. In the run up to an uncertain election, some traders are already installing safeguards against major shifts in price. Forster pointed that the price of options has increased because of volatility risk premium where people try to avoid further risks in their portfolios.

The higher cost for protective options indicate that traders understand potential risk factors and are ready to pay a premium for insurance of their investments. Through delineating the levels of Bets and price fluctuations, Derive and other platforms suggest that the election might be the turning point in the Bitcoin.

The move toward short-term contracts, especially around the $ 80,000 strike price, proves the high risk involved as the investor tries to draw a balance between the bulls and bear’s spirit. UK-based analysts also expect Bitcoin to be more volatile as trading Near the election date and after it, as this cryptocurrency and the traditional financial markets may react differently to the results.

Conclusion: High Expectations and High Risk

With the American election on the horizon, Bitcoin traders are as divided but active as ever, $80,000 being the potential and the threat. New statistics illustrate an interesting combination of longs and hedges, which indicate the volatility of cryptocurrencies.

In the long run, therefore, regardless of who wins the election and the impact on prices that outcome may have in the short term, the future is uncertain for Bitcoin. As has been observed in the previous cycles, political events entangled with economic activities will continue determining the price of the cryptocurrency for many more months. Since the market is sensitive to any form of election outcomes, Bitcoin might either hit new highs or experience steep declines depending on events in the following days. Keep following TheBITJournal and keep an eye on the Bitcoin price.

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