Can Bitcoin exit the range that has prevailed for 17 days? BTC price derivatives paint a curious picture.
For the past 17 days, Bitcoin price has been trading within a narrow 8.5% range from $27,250 to $29,550, causing the 40-day volatility metric to drop below 40%. This wasn't restricted to cryptocurrencies as the S&P500 index's historical volatility has reached 17%, its lowest level since December 2021.
The debt ceiling drama has caused Treasury Secretary Janet Yellen to warn that a"steep economic downturn" would follow if Congress fails to act in the next few weeks. For Bitcoin, an alarming sign would be a negative futures contract premium or increased costs for hedging using options. That’s why investors should closely track those BTC derivatives metrics.are popular among whales and arbitrage desks. However, these fixed-month contracts typically trade at a slight premium to spot markets, indicating that sellers are asking for more money to delay settlement.
As displayed above, the options delta 25% skew has recently flirted with excessive optimism, as on May 7 the protective put options were trading at a 7% discount relative to similar neutral-to-bullish call options.
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