Fear of a Disadvantage of Bitcoin and ether (Eth) has essentially relieved according to the latest option market data. However, the pace of the next upward feature of these cryptocurrencies will largely hang on the size of the expected bold rate planned for September 17.
BTC’s seven-day call/put skew, which measures how implicit volatility is distributed across calls against puts expiring for a week, has recovered to almost zero from the Bearish 4% a week ago, according to Data Source Amberdata.
The 30- and 60-day option is leaning, although still a little negative, the reboar of last week’s low, signalizing a remarkable easing of downward fear. Ether’s Options Skew exhibits a similar pattern at the time of writing.
SKEW shows the market’s directional bias, or to what extent dealers are more concerned about prices that rise or fall. A positively skewed suggests a bias against calls or bullish option playing, while a negative reading indicates relatively higher demand for putting options or downward protection.
Reset in options comes as the Bitcoin and Ether prices see a renewed recovery in the construction of Wednesday’s Fed-SAT decision, with the central bank to a large extent expected to reduce the rates and lay the basis for further relief in the coming months. BTC has achieved over 4% to over $ 116,000 in seven days, with Ether increased almost 8% to $ 4,650, according to Coindesk data.
What happens next depends largely on the size of the impending bold rate. According to CME’s Fed Funds Futures, dealers have priced in over 90% probability that the central bank will reduce the rates by 25 basic points (BPS) to 4%-4.25%. But there is also a small option for a Jumbo 50 BPS movement.
BTC could go Berserk if Fed delivers the Surprise 50 BPS movement.
“A surprise 50 bps -rate cut would be a massive +gamma purchase signal for ETH, Sun and BTC,” said Greg Magadini, director of derivatives at Amberdata, in an E email. “Gold will go absolutely nuts too.”
Note that the derived-listed solar settings already exhibit a strong bullish atmosphere with calls dealing with 4-5 volatility premium for sets.
Magadini explained that if the decision comes in line with the expectations of a 25 BPS cutting, then a continued calm “grinding is higher” for BTC is likely. ETH can meanwhile take another week or so to gene test all times and convincing trade over $ 5,000, he added.
