Bitcoin Traders Hedge Downside Risk Amid U.S. Election Volatility
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Bitcoin options traders are hedging against potential price declines ahead of the U.S. election this week. Data from the CME shows an increased demand for short-term puts, reflecting market caution around election-induced volatility. However, long-term options on both CME and Deribit remain bullish, signaling optimism for a potential year-end rally to $80,000. Analysts predict potential BTC price swings of $6,000-$8,000 as the election outcome unfolds.
Bitcoin Traders Brace for Election Volatility With Downside Protection
As the U.S. presidential election looms, Bitcoin traders are actively managing risk through short-term put options, indicating heightened caution in the face of potential market turbulence. This trend is reflected in the 25-delta risk reversal metric for weekly contracts on the CME, which shows puts trading at a premium over calls.
Protective Puts Signal Caution Ahead of Election
Data from CF Benchmarks reveals that CME contracts expiring within the week show a -1.3% delta risk reversal, meaning puts are more expensive than calls. This pricing reflects traders’ concerns over a potential price drop as the election results unfold. The neck-and-neck race between Democrat Kamala Harris and crypto-friendly Republican Donald Trump has left the outcome uncertain, adding further pressure to BTC markets.
Longer-Term Outlook Remains Constructive
Despite the short-term caution, longer-duration options retain a bullish tilt. Data shows that options maturing on Nov. 29 and beyond are skewed positively, favoring calls. This constructive outlook aligns with analyst expectations of a year-end rally, with targets set for $80,000 and above, fueled by optimistic sentiment around broader market trends.
Key Metrics and Expected Market Impact
The BTC price has recently pulled back to $68,000, following a brief surge above $73,500. With the election outcome anticipated by Friday, some analysts project a BTC price swing of $6,000-$8,000. Deribit options also indicate a neutral to bullish sentiment beyond this week, showing minimal difference between call and put pricing for near-term expiries.
What to Expect Next: Market Moves and Election Impact
As Bitcoin traders navigate election week, short-term downside protection suggests caution. However, with constructive longer-term sentiment, market participants remain optimistic about BTC’s upward potential heading into 2025.
Bitcoin Traders Brace for Election Volatility With Downside Protection
As the U.S. presidential election looms, Bitcoin traders are actively managing risk through short-term put options, indicating heightened caution in the face of potential market turbulence. This trend is reflected in the 25-delta risk reversal metric for weekly contracts on the CME, which shows puts trading at a premium over calls.
Protective Puts Signal Caution Ahead of Election
Data from CF Benchmarks reveals that CME contracts expiring within the week show a -1.3% delta risk reversal, meaning puts are more expensive than calls. This pricing reflects traders’ concerns over a potential price drop as the election results unfold. The neck-and-neck race between Democrat Kamala Harris and crypto-friendly Republican Donald Trump has left the outcome uncertain, adding further pressure to BTC markets.
Longer-Term Outlook Remains Constructive
Despite the short-term caution, longer-duration options retain a bullish tilt. Data shows that options maturing on Nov. 29 and beyond are skewed positively, favoring calls. This constructive outlook aligns with analyst expectations of a year-end rally, with targets set for $80,000 and above, fueled by optimistic sentiment around broader market trends.
Key Metrics and Expected Market Impact
The BTC price has recently pulled back to $68,000, following a brief surge above $73,500. With the election outcome anticipated by Friday, some analysts project a BTC price swing of $6,000-$8,000. Deribit options also indicate a neutral to bullish sentiment beyond this week, showing minimal difference between call and put pricing for near-term expiries.
What to Expect Next: Market Moves and Election Impact
As Bitcoin traders navigate election week, short-term downside protection suggests caution. However, with constructive longer-term sentiment, market participants remain optimistic about BTC’s upward potential heading into 2025.