The post Bitcoin Options Market Predicts Major Price Swing Amid Reflexivity Season, Says Derive Founder appeared on BitcoinEthereumNews.com.

Bitcoin’s future price movements can be gauged by closely observing the derivatives market, particularly options contracts. Founders and analysts within the crypto space indicate a growing influence of reflexivity within these markets. “As prices rise, traders are expecting continued momentum, driving a self-reinforcing cycle of higher prices,” explains Nick Forster, founder of DeFi derivatives protocol, Derive. Discover the intricate dynamics of Bitcoin’s options market and understand how traders are leveraging upcoming economic and political events. Rising Interest in Bitcoin Options Amid Market Reflexivity The derivatives market is increasingly becoming a significant predictor of Bitcoin’s price swings. Nick Forster, the founder of DeFi derivatives protocol Derive, highlights the concept of “reflexivity season” within the options market. Reflexivity suggests that market participants’ actions and expectations influence asset prices, which, in turn, alters participant behavior, creating a reinforced feedback loop. This cycle is evident in the current 30-day call/put skew for Bitcoin options, which indicates a strong bias towards upward volatility. Consequently, traders are betting on higher price caps, expecting Bitcoin to reach between $80,000 and $90,000 by the end of November. The Impact of Upcoming Political and Economic Events The current market sentiment is heavily influenced by impending significant political and economic events, such as the upcoming U.S. presidential election. These events are expected to trigger volatile market movements, contributing to the existing trend of high volatility for Bitcoin. Recently, Bitcoin has seen fluctuations between $53,000 and $64,000, and as of now, stands at $63,000—down by 1.5% on the day, according to CoinGecko data. Options Market Gaining Traction Among Traditional Financial Players Despite the options market being relatively smaller compared to the spot market where billions are traded daily, there’s a growing interest amongst larger traditional players. They are starting to incorporate options contracts into their trading strategies alongside U.S.-based Bitcoin exchange-traded…

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Filed under: News - @ September 24, 2024 3:23 am