Navigate through crypto's most critical week as markets face US elections and Fed decisions. Analysis of BTC's $70K battle and ETH's crucial support levels, with actionable volatility trading strategies.
Greetings from an autumn day,
We've left behind another week where crypto raised everyone's hopes but continued with subsequent declines. Similarly, we've finished a month that was good for BTC but bad for ETH. We've also entered one of the most critical weeks for the market. This week is extremely crucial with the US Elections and Fed Interest Rate decision.
You can click here for November's general expectations and data, and here to read my expectations from last week.
Bitcoin
BTC, which opened the new month at 70k, has been declining since then. Last week's failure to touch ATH and the lack of a strong recovery so far is also concerning the market. We're in an important week with the elections tomorrow, followed by the Fed's interest rate decision on November 7th. I don't need to mention that there could be up and down movements on election day and that we need to be careful. However, a nice volatility trade could be made.
Last week, I mentioned that the price would be at a critical threshold going into the election and would show market indecision. Currently, BTC is below 70k and slowly declining. With a new month, our weekly and monthly volatility has also changed. November's weekly average implied volatility is 14.7%. This means our implied volatility range for this week is 58.5-79k.
While the market is undecided this week, Call contracts are more dominant as they think Trump will win the election. Contracts are particularly dense at the 80k price point. My thinking is that BTC's inflation-adjusted ATH price is around 79k, as we mentioned before, and it's likely that the 80k price will act as resistance for this reason. Also, we're seeing increases in our volatility.
Ethereum
ETH, which opened November at 2500, has gotten quite close to its recent lows, and the picture doesn't look very pretty. It's not unreasonable to think that ETH will fall further in a downturn and clean out to the lows at 2150. For volatility trading, you might consider ETH for downside and BTC for upside.
The last movement remained as a Lower High. A movement toward 2550 followed by cleaning out the lows seems likely. November's average weekly implied volatility is 16%. This shows us that this week will be in the 2050-2850 range. Let's see if the price will exceed our expected volatility?
In ETH, the Put/Call Ratio is still close to 1 in month-end contracts. Although the situation looks much better in November 8 contracts, it could be more affected in case of unexpected news or false news.
ETHBTC
Here, after making an upward movement as I expected, it continues its decline. Although it saw a reaction from the 035 point, I don't think this will be strong. I'm waiting for the 0.032-0.03 area for the trend to reverse.
Trade Of Week
Let's come to our election volatility trades. If we expect a 4% daily movement on the BTC side, our likely prices could be 71.5 upward and 65.5 downward. As contracts, November 7 dated 71.5k contract is around $100, while the 65.5k contract is around $80.
For ETH, we can take the 4% range as 2325 ($32) - 2525 ($37). The total cost is $180 on the BTC side and approximately $70 on ETH. If you take a BTC Call contract and ETH Put contract, it costs about $132.
If you're looking for more affordable prices, you can also look at November 6 dated contracts. What do you think the situations will be and will there be the expected price fluctuation?
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