Professionals Debate the Crypto’s Price VolatilityColin Baseman
Crypto experts keep debating and discussing the BTC’s price volatility. Today, according to the latest news reports, six hundred and seventy-five million USD worth of the crypto options expired. Now the question is how much this may affect and impact the price.
BTC options have finally expired, but, at the same time, experts are not definite about this event’s influence on the price and its volatility. Some think this all will get BTC to face a significant price move. Before options expired, the price fell by seven percent. Traders believe this occurred because of the uncertainty in the American stock market. Since the number of coronavirus victims has been increasing and thousands of citizens lost their jobs, participants felt the tension in the community.
Traders may consider other factors that can impact volatility. However, the most recent statistics prove that there is a high chance of a spike in the future.
Taken from Skew
Right now the situation allows traders to purchase an asset at a certain price and date. If a trader buys it at nine thousand five hundred USD by June, he can purchase the crypto at the price point by the end of the month. A key support range between nine thousand USD and nine thousand two hundred USA can add to the volatility.
Chances Are Smaller Than Desired
Official representatives of Derbit claim that the chance of volatility is not that big. And the expiration may not increase the trend. They also mentioned that a spike may never occur because of the limited in-the-money call options. An ITM gives the right to purchase BTC at a lower price.
The mentioned options have little impact because contracts were opened when the price ranged between nine thousand USD and ten thousand USD. Experts cannot guarantee a massive buying demand and they do not predict selling pressure, either. Volatility is unlikely to surge because the number of ITM options at the shown price levels is rather limited.
As analysts say, the options market keeps expanding and Derbit notices new perspectives which include open interest as long as volume. All of these factors will increase the importance of the markets and the BTC price. The open interest increased much faster than the futures market a few weeks ago. This proves the options market will continue to increase. Since the end of last month, it has grown six hundred million USD, which is over forty-six percent. However, the open interest of the futures market hasn’t changed too much within the same period.
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