- Bitcoin’s Implied Volatility begins to decline. Options market expects sideways momentum for BTC in the future.
- Price and velocity declined, indicating low transaction activity around BTC.
Bitcoin’s price has seen some harsh volatility over the last few months, however over the last few days it has appeared that BTC is expected to move sideways in the near future.
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Some stability for BTC in the future?
This was indicated by the declining Implied Volatility for Bitcoin. According to glassnode’s data, it has started to reach new lows. This showcases the options markets expectation of Bitcoin to maintain stability in terms of price.
Source: glassnode
Coming to the behaviour of traders, at press time, approximately 27,000 Bitcoin options were nearing their expiration date, possessing a Put to Call Ratio of 0.64. A Put to Call Ratio of 0.64 indicates a higher proportion of open call options, which suggests that market sentiment leans towards price increase expectations.
Additionally, these options carry a maximum pain point value of $26,500. The maximum pain point at $26,500 signifies the price level at which option holders may experience the most significant financial losses. The expiring options collectively possess a notional value of $720 million, signifying a substantial stake in the market.
Will FUD “spread”?
However, the spreads on Binance, which are currently about 20 times wider than those on Coinbase and Kraken could impact BTC in the long run.
Spreads on https://t.co/pup2WYms9R are currently about 20 times wider than those on Coinbase and Kraken ???? pic.twitter.com/qVt06FGnx7
— Kaiko (@KaikoData) June 9, 2023
Wide spreads indicate a larger difference between the buying and selling prices of BTC on Binance compared to Coinbase and Kraken. This suggests lower liquidity on Binance, making it more challenging for traders to enter and exit positions efficiently. Reduced liquidity can lead to increased price volatility and potentially impact BTC’s stability.
Additionally, wider spreads typically result in higher trading costs for market participants. Traders who need to buy or sell BTC may incur greater expenses due to the larger price difference between the bid and ask prices.
Read Bitcoin’s Price Prediction 2023-2024
At the time of writing, BTC was trading at $25,754.89 according to CoinMarketCap. Over the last week, BTC’s price declined materially. Coupled with that, BTC’s velocity fell, indicating a drop in activity. Additionally, the interest in Bitcoin’s NFTs also fell as indicated by the falling NFT trades on the network.
Source: Santiment