Bitcoin traders are becoming cautious ahead of the U.S. elections, evidenced by increased demand for put options as protection against price drops. Bitcoin’s price has decreased to $68,000 from over $73,500 due to shifting political dynamics. Despite short-term bearish sentiments, analysts forecast a potential year-end rally to $80,000 or more, amid a closely contested election between Kamala Harris and Donald Trump.

Bitcoin traders are expressing concern regarding a potential price drop during the upcoming U.S. election week, as indicated by activity in the bitcoin options market at the CME. Observers have noted that put options, which offer protection against declines, have become more expensive compared to calls, suggesting a bearish sentiment among traders. The 25-delta risk reversal metric exhibited a -1.3% reading, highlighting a preference for puts among shorter-term contracts set to expire soon. Recent developments revealed that Bitcoin’s price has seen a decline to $68,000 from a peak of over $73,500, coinciding with a decrease in former President Donald Trump’s prospects, perceived as favorable for cryptocurrency. Despite the bearish sentiment for the week, longer-term options maintain a positive skew towards calls, reflecting an anticipated bullish trend towards year-end, with expectations for Bitcoin to reach $80,000 or higher. Current polling data indicates a tight race between Democratic candidate Kamala Harris and Donald Trump, presenting a 50% chance that unexpected results could cause Bitcoin’s price to fluctuate by $6,000 to $8,000. Nevertheless, options trading on the Deribit exchange shows a generally neutral outlook, supporting the notion of a balanced market perspective as traders navigate the evolving political landscape and its impact on cryptocurrency.

The article addresses the current sentiment among Bitcoin traders as they approach a significant political event—the U.S. presidential election. Traders often utilize options—financial derivatives that grant the right to buy or sell assets at specified prices—to speculate on future price movements or to hedge against potential losses. The activity in the bitcoin options market, particularly the price dynamics of put versus call options, serves as an indicator of traders’ expectations and reactions to external factors such as political developments.

In conclusion, Bitcoin traders are adopting a cautious stance as the U.S. election approaches, reflected in their preference for protective put options in the near term. While recent price corrections have prompted bearish sentiment, longer-term predictions remain optimistic. As the political climate evolves, the market may experience volatility, necessitating careful monitoring of both trading strategies and external influences impacting Bitcoin’s value.

Original Source: news.az

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