Bitcoin (BTC), the largest cryptocurrency by market cap, hit a record high above $109,000 on Monday, raising implied and learned volatility to levels since the yen’s value declined in August.
Realized volatility is the previous fluctuations in the value of Bitcoin over more than 30 days. It reached 67 on the Bitcoin Volatility Index (BVOL) on the Deribit. The Volmex Bitcoin Volatility Index (BVIV) rose to a high of 71. Implied volatility is the market expectation related to long-duration movements derived from the value of options. All indices are up approximately 2% on the day.
“The positive correlation between bitcoin’s price and implied volatility remains intact. It’s a sign traders are chasing options, particularly calls, as risk reversals show calls are trading at a premium relative to puts that offer downside protection,” said Omkar Godbole, a markets analyst and managing editor of markets at CoinDesk
In addition, short-duration calls are higher than longer-duration calls, a rare occurrence that indicates strong bullish sentiment in the short term, according to Andre Dragosch, Bitwise’s head of European research. Open interest in features rose to 44,000 BTC, reflecting increased speculative activity, Dragosch noted.
Merchants expect rapid value after the possible announcement of President -elect Donald Trump of a strategic Bitcoin stash.
“Trump’s influential use of social media, which has traditionally moved markets, adds to the uncertainty surrounding the coming days,” suggests Mitch Galer, trader at GSR. “Strategic Crypto Reserve Speculation and Potential Deregulation, Crypto Markets Bullish for Higher Gains This Year. “