Today the main Bitcoin and crypto derivatives exchanges will govern futures and options due this month.
Bitcoin futures and options expiring
The fact is that BTC put options are becoming more expensive, and as they are often used as a hedge against possible price falls, their appreciation implies bearish sentiment among Bitcoin traders.
However, during the day it is expected an increase in volatility, due precisely to the expiry of the options. They expire well 51,900 contracts for a total value of nearly 3 billion dollars. On Deribit alone, options for 2.5 billion dollars expire.
Bearish sentiment is highlighted by the index three-month skew put-call, which measures the cost of puts versus calls. Not only did it turn positive, but it hit the highs of the last 6 weeks.
This means that currently put (or sell) options have a higher demand than call (buy) options. Suffice it to say that at the beginning of the month this indicator was at -5%, while now it is at 3%.
In recent days, the trend has also been similar for the one-week and one-month put-call index. The one at six months, on the other hand, has become neutral.
However, it should be remembered that another motivation could be the one that many traders prefer use options to hedge downside risks after taking long positions on the spot or futures market.
The impact of Fed policies
It is possible that this increase in bearish sentiment could be related to strength of the US dollar and the Fed’s monetary policy.
In fact, with inflation that seems to rise further, the hypothesis begins to emerge that the US central bank can conclude its stimulus program more quickly, reducing earlier than expected the purchase of assets on the financial markets with money created out of thin air. or by raising interest rates.
In fact, the Fed has already started tapering, but fears now point to an acceleration of the reduction in stimulus. Paradoxically this could keep the dollar strong in the short term, limiting the growth potential of Bitcoin.
It should also be added that in the US this is Thanksgiving weekend, and this could drastically reduce trading volumes on the financial markets. In such situations it is entirely possible that an increase in volatility will occur.
However while in the middle of the month the general sentiment looked decidedly bullish, but the price of Bitcoin has not increased, now that it is becoming bearish it is by no means impossible that the price once again disappoints expectations.