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Will Bitcoin Bounce Back? Traders Place Their Bets on a Rocky Q4, Data Shows

Bitcoin’s recent volatility has left traders uncertain about its future trajectory. After reaching a high of $57,300, the cryptocurrency has now slowed down and is trading at $55,966, indicating a decrease of 1.6%. This market behavior has led traders to adopt more defensive strategies, as seen by the increase in open interest in Bitcoin options and a spike in implied volatility for short-term options.

Data from Deribit reveals that the put-call ratio, which compares the trading volume of put options to call options, is higher than 1. This suggests that traders are still bearish on Bitcoin and are placing more trades betting on or hedging against further price drops. The trend of higher implied volatilities in short-dated options compared to longer-dated ones also reflects a bearish sentiment in the market.

Analysts from ETC Group agree with this assessment, noting the increase in demand for downside protection and the inverted term structure of volatility. These indicators signal a market skewed towards bearishness, with short-term options exhibiting higher implied volatilities than longer-term options.

Various experts have offered their perspectives on Bitcoin’s future. Peter Brandt anticipates a double top setup, which could result in price drawdowns as low as $44,000. Timothy Peterson, on the other hand, holds a more positive view, stating that if Bitcoin can close above $50,000 by the end of July, there is a strong chance it will maintain or even increase in value by October. Peterson assigns a 60% probability to Bitcoin trading sideways in the upcoming quarter and a 25% chance of breaking its all-time high within the next three months.

With such uncertainty in the market, traders and investors are navigating through choppy waters and keeping a close eye on various indicators and expert opinions to determine Bitcoin’s potential trajectory.