Is a Bitcoin Breakout Looming? Options Markets Signal Imminent Volatility Surge
July 11 2024 - 10:00PM
NEWSBTC
QCP Capital has recently released a new market analysis offering
insight into what might be in store for the price of Bitcoin (BTC)
— more importantly, which direction it could move next. These fresh
insights particularly focus on the options market. Market
Anticipates Movement: Analyzing Bitcoin Options The latest report
from QCP Capital has identified an interesting pattern in the
Bitcoin options market, highlighting a rise in front-end volatility
specific to BTC. This increase by 5 points in short-term volatility
indicates that traders are preparing for larger price swings over
the next few weeks. Related Reading: Bitcoin Traders Beware:
Analyst Warns Of Potential Traps Amid Price Fluctuations
Additionally, the increasing number of topside risk reversals
suggests growing expectations among traders that prices will likely
continue to increase favorably, influencing market sentiment.
According to QCP Capital, this combination of higher implied
volatility and attractive risk reversals sets the stage for a
potential bullish price rally. The QCP analysts particularly noted:
Bitcoin front-end volatility increased by 5 points this morning,
with risk reversals favoring the topside, signaling the market’s
anticipation of potential topside volatility. While Bitcoin has
shown some signs of recovery as the market digests these
fundamental analytical forecasts, volatility persists on the way
up. Particularly, amid the gradual rebound, the asset still appears
to be getting pulled by the bears. Earlier today, BTC traded as
high as $59,313; however, at the time of writing, the asset has now
shredded most of its gains for today and is now trading at $57,766,
a few dollars away from its 24-hour low of $57,127. This continued
volatility occurs against the backdrop of a broader financial
market that is constantly changing, with a special focus now on the
release of the Consumer Price Index (CPI). QCP noted: With the
perceived reduction in supply, a softer CPI print could serve as
the catalyst to break out of this [current] range, especially
bolstered by the upcoming launch of ETH spot ETF trading next week.
We identify a compelling risk-reward opportunity on the upside
through Digitals. Long-Term BTC Holders Sentiment Furthermore,
regardless of all of these, the underlying confidence among
Bitcoin’s long-term investors remains unshaken. According to the
latest on-chain data from Glassnode, this cycle’s steepest price
corrections are not even persuading these investors to sell.
Glassnode reported that despite several market blips, like Bitcoin
dipping to as low as the $53,500 mark last week, long-term holders
are as determined as ever and have not changed their aspirations in
months. The data suggests that only 36% or perhaps even less of the
total Bitcoin capital has moved during this week’s sell-off events
– substantially lower than past major market capitulations with
over 60% involvement. Related Reading: Bitcoin Falls Out Of Step
With US Equities, What This Could Mean For The Crypto Market This
data suggests solid behavior that supports a well-established
underlying market structure even as BTC undergoes one of the
toughest post-halving cycles ever. Featured image created with
DALL-E, Chart from TradingView
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