As Bitcoin soared past $103,000, the unseen forces in the options market began to unfold a gripping narrative. While many watched the price charts, a deeper story was playing out in the options/futures open interest ratio—a predictor of the market's pulse. A moderate ratio suggested that hedgers were influencing Bitcoin's gravity-defying run. But when Bitcoin's ascent faltered, this balance shifted and the consequences rippled through the market. What mysterious factor contributed to Bitcoin's dramatic dance with volatility? Delve into these revelations for the answer.
Options wield outsized influence on Bitcoin’s volatility Options wield outsized influence on Bitcoin’s volatility
December's options/futures open interest ratio spike shows how traders' hedging exacerbates Bitcoin’s price volatility.
2 min read
Updated: Dec. 10, 2024 at 11:06 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.