The consolidation trend of Bitcoin at the lower limit of its long-held Trading range shows no signs of it in the near future subside.
This Options Trader does not stop, however, to be increasingly more careful movement with respect to an imminent downward, because short-term BTC-options were caught last week in a solid upward trend.
This suggests that a Trader has to factor in the increased chances of a downward movement.
Although there are not many obvious signs that a downward volatility is imminent, there might be some “external forces” that catalyze possibly soon, a sell-out.
Options traders do not believe in Bitcoins stability
In the past week, Bitcoin was relatively stable at around 9.200 $.
Both buyers and sellers have tried to achieve a certain dynamic, however, has been any attempt as a non-volatile memory.
This price action came about because BTC was a decrease in both the Trading volume and the liquidity – both factors in the continued downward contribute to the trend.
Because with $9,000 seems to be a strong Support-base for the digital asset to be of value, it remains unclear whether or not the seller will be able to use this level to break or not.
Options traders, however, seem to be of the opinion that a downward movement is imminent.
According to the data of the analysis platform Skew, there were short-term Bitcoin Options in the past week, a remarkable change:
“The market is cautious? Skew of the short-term Bitcoin options has recovered strongly this week.“
Data Source: Skew
Options-Skew is Essentially the implied volatility of certain contracts on the basis of their expiry dates.
Contracts with a high Skew indicates that investors are pricing in a higher probability of downside volatility.
If you look at the of the analysis platform offered graphic, it is clear that traders are pricing in the downside volatility for the next month. This expectation decreases, if you look at longer periods of time such as three months, and six months.
What could this catalyze downside volatility?
Although there are no clear catalysts for a strong short-term decline, has unveiled a analysis firm, that there are some “external forces” that prevent a recovery of Bitcoin.
In a Glassnode-report, two main factors, the BTC in the way of recognizing an upward momentum.
Consequently, Bitcoins price action is suppressed by a lack of clarity about the Status of Bitcoin as a “safe Harbor” and the growing uncertainty about how this consolidation phase, ultimately, is about to expire.
Since the crypto-daddy has in recent weeks increased correlations with the S&P 500, may lead to decline of the stock market also BTC down.
Until that correlation breaks down, you could wait for the investor in the expectation of greater clarity over the medium-term prospects of the Kryptos on.