As Federal Reserve Chairman Jerome Powell’s lecture at the Fed’s annual Jackson Hole Economic Policy Symposium approaches, many remainWinner’s speech, the thread in everyone’s minds is: What level of volatility can Bitcoin (BTC) hit, right around Bitcoin’s 113-day mark, at 669$ up to potentially 1,131,916$ (BTC$113,191.61)? Bitcoin’s potential for volatility remains in停车场 themes, and the answer lies with the ballpark of implied volatility and option pricing related to Bowe’s addressing.
Pulkit Goyal, head of trading at crypto market maker Orbit Markets, informed CoinDesk early on. Orbit’s focus is on providing traders access to structured derivative instruments and options customized to Bitcoin’s unique characteristics. “ ‘The key metrics used to gauge Bitcoin’s volatility, including implied volatility, option pricing, and option greeks, should help traders better estimate the likelihood of a significant price movement.”
Option pricing is calculated by the market participants, using factors such as implied volatility, the time until expiration of options, and the outright price range of the underlying asset. Orbit markets relies on the 30-day realized volatility of 29%, which translates to an average daily volatility of 1.52%, a figure derived from the standard practice of calculating historical volatility.
Implied volatility has risen to an annualized level of 49%, or 2.5% on a daily scale, according to TradingView. This high level of implied volatility suggests that Bitcoin’s price could swing as much as 2% either direction during the trading day.
Goyal emphasized that volatility is direction-agnostic, meaning that price movements in either direction are possible. However, the likelihood of downside movement is higher in the case of a balanced tone, as seen in the previous Coalition’s round. traders are often preparing for such outcomes. On the other hand, a dovish tone, often associated with rate cuts, has historically led to a known swing in price moves.
The skew in implied volatility suggests that believe Bitcoin is likely to experience a short-term drop of 25-delta PUTs over calls. This factor, however, adds to the uncertainty surrounding Bitcoin’s potential price moves in the short term. Goyal added, “‘‘This data will, however, be critical for determining the health of the markets, and the position of BTC in the market nad movement direction, in particular.’’**
Traders in the crypto space are already starting to appreciate the potential downside protection offered by put options, which have become increasingly popular in the past year. Goyal’s analysis highlights the importance of understanding the factors driving Bitcoin’s volatility and the potential risks, including marketอร่อย. Overall, while Bitcoin’s volatility is not extreme, the insights from the Federal Reserve’s lecture provide valuable guidance for traders and market participants alike.
