I’ve been doing some digging after the recent craziness in crypto and I think I might have a handle on things. The US election just happened, and it looks like Trump is back in business. But what really caught my eye was how the options expiry this week played a massive role in all of this. Let’s break it down.
The Political Catalyst
First off, let’s talk about the elephant in the room: political events. Bitcoin hitting $75k and Ethereum at $2.9k doesn’t seem coincidental to me. It seems like a lot of people are betting (pun intended) on a pro-crypto environment with Trump at the helm. If you look back, every time there’s been a favorable candidate for crypto, the markets have reacted positively.
Now, don’t get me wrong; Kamala Harris as president would probably lead to more regulatory scrutiny (and less fun). But it’s clear that market sentiment shifts based on who’s sitting in office.
The Options Expiry Conundrum
Then there’s the matter of options expiry. This week we had $3.7 billion worth of BTC options and $860 million ETH options expiring. And guess what? The max pain point was set at $69k for BTC and $2.5k for ETH.
If you’re not familiar with ‘max pain’, it’s essentially where most options expire worthless, causing maximum loss to traders who are positioned incorrectly. It seems like a lot of people got wrecked this time around.
And here’s something interesting: implied volatility (IV) is usually high when things are bearish or uncertain, but right now it’s low as hell post-election. That usually indicates that a big move is coming… but in which direction?
Strategies Amidst Chaos
Now that we’ve established the chaos surrounding us, let’s talk strategies for those brave enough to venture into these turbulent waters.
One popular method during such volatile times is using straddles or strangles—basically betting on big moves regardless of direction.
Then you have your classic scalping techniques; making small gains off rapid price movements can be lucrative if timed correctly.
And let’s not forget about those who trade towards ‘Max Pain’—it can be an effective strategy if you know what you’re doing!
Final Thoughts
So here we are folks; crypto betting exchanges are alive and well amidst all this madness! Whether you’re bullish or bearish there’s one thing’s for sure: understanding these dynamics will help you make better decisions going forward.
Are we heading into another bull run? Or is this just another trap before heading down? One thing’s for sure… I’ll be watching closely!
