Bitcoin jumped to its highest over two months when the US government closed operations, which probably set the stage for a positive Fiat liquidity impulse.
The leading cryptocurrency has risen almost 4% over the last 24 hours, with prices short rising to $ 119,455 for the first time since mid-August, Coindesk data shows. Other big tokens such as ether At Solana and has risen 4% to 7%. Coindesk 20 index (CD20) has jumped 5% to 4,217 points.
The rally will follow a US government’s shutdown on Wednesday after a deeply divided congress prevented officials from reaching a financing agreement.
The shutdown could delay Friday’s non -yard -wage report, the official monthly job that would eventually set the stage for a positive liquidity impulse or expansion of liquidity in the financial system. This often results in easier access to funding, reduces the cost of borrowing and encourages economic growth and risk taking in the financial markets.
“If ADP is a leading signal and the BLS printing is delayed, Fed is likely to deliver a 25 BP cut in October and pair it with guidance that holds another cut on the table by December, next to an early nodded against tapering quantitative tightening (qt). The mixture should pull real yields lower and soften the dollar to Q4, with a mild bear Golden bids.
Wednesday’s ADP -private payroll report painted a gloomy picture of the labor market and strengthened the case for continued efforts of bold. The central bank reduced the rates by 25 basic points last month, while suggesting further easing in the coming months.
Mena added that BTC’s price gain in the wake of the government closed could be a hint of an impending explosive rally.
“The message is clear: With traditional data releases in Flux and macrous security that runs high, Bitcoin is still one of the few assets that thrives when the old Playbook breaks down. Investors had to see this moment close – it could mark the next explosive leg higher in crypto markets,” he noted.
Options look cheap
One way to play the impending big step while being uncovered could be through derived -noted opportunities that look cheap at Frontend, according to Amberdata’s director of derivatives Greg Magadini.
“After a long ‘dry spell’ for BTC volatility, the US government’s shutdown could finally be the catalyst to get BTC to move a lot,” Magadini told Coindesk. “This combined with the steep Kontango in implied volatility structure makes the options look cheap.”
The steep Kontango in the implied volatility (IV) term structure, represented by an upward-sloping IV curve from short-term to long-term maturation, indicates that the market expects future volatility to be significantly higher than the almost term volatility.
This makes the options in the short term relatively cheap. Election prices are affected by implied volatility.
Magadini quoted Long Straddle as one of the preferred strategies to play the impending volatility boom. It also involves the purchase of both call and set options at the same strike price and with the same outlet. The call setting gets value when the underlying asset price increases while the PUT setting provides protection against price drop. Together, this means that the stray buyer’s profits from significant price movements in both directions.
“The USD is likely to see currents on the back of the shutdown and this week’s salary number … which will guide bold. These catalysts could either get BTC to collect (like a dollar hedge) or crash (whose risk assets panic),” he said, explaining bias for Straddle.
