Bitcoin investors seem worried about the possibility of Thursday's U.S. CPI injecting renewed downside volatility into the market. r by godbole17
Bitcoin traders have turned cautious ahead of an impending U.S. inflation report, after being burnt the last time by positioning for a post-report bullish move.
The core CPI is considered a better indicator of underlying inflation. So, an expected uptick would back the case for continued rapid-fire Federal Reserve rate hikes that have wrecked risk assets, including cryptocurrencies, this year. "We have seen large buying in October expiry bitcoin puts at $17,500 and $18,500 strikes ahead of the CPI," Shiliang Tang, chief investment officer at crypto hedge fund Ledger Prime, said.The recent decline in the short-duration call-put skew is in stark contrast from the trend seen a month ago when the metric crossed above zero, suggesting a bias for calls.
"Last month, ahead of the inflation data, traders bid weekly calls, pushing the seven-day call-put skew above the positive territory. However, that trade was a huge loser. As such, traders are staying away from such bets this time," Gregoire Magadini, CEO of options analytics platform Genesis Volatility, told CoinDesk.
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