Zinger Key Points
- Bitcoin options signal upcoming market turbulence following positive inflation data.
- Interest rate expectations shift as traders weigh the impact of new inflation reports.
Bitcoin BTC/USD option traders are bracing for heightened volatility in the near future, according to a new report from QCP Capital.
What Happened: The analysts on Thursday highlighted a five-point rise in front-end volatility for bitcoin options, The Block reported.
This surge in volatility is coupled with risk reversals favoring further Bitcoin price gains. The analysts also mentioned the Thursday release of the core Consumer Price Index (CPI) reading. The eventual data came in at a negative 0.1% pace against forecasts for a gain of 0.1% and May’s 0.0% read, the smallest consecutive monthly gains in core inflation since August 2023. Analysts suggest this moderated pace could influence U.S. Federal Reserve’s rate-cut decisions.
Interest rate traders have increased the likelihood of a September rate cut, from 71.8% on Wednesday to 91.2% following the CPI data.
Why It Matters: The anticipated volatility in Bitcoin options comes as liquidations in the German government’s Bitcoin holdings have exerted downward pressure on Bitcoin prices.
In contrast, Bitcoin spot ETFs have continued buying the dip. Wednesday saw net inflows of $147 million, as the iShares Bitcoin Trust (NASDAQ: IBIT) took in $22 million and the Fidelity Wise Origin Bitcoin Fund FBTC noted inflows of $57 million.
Bitcoin traders see the current price trend as temporary. Travis Kling of Ikigai Asset Management wrote that the current bearish downtrend is “easier to look through” than previous ones and should be seen as an opportunity.
What’s Next: These topics are expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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