Bitcoin: Calm before the storm? Key economic data will define its future this week
The Singapore-based trading firm, QCP Capital, opened its Monday note with a blunt assessment: "Implied volatilities continue to be under pressure, with BTC stuck in a narrow range as summer approaches." According to the options house, the market is shifting towards the northern hemisphere holiday season in the same way it did a year ago, when one-month volatility in the at-the-money (ATM) price plummeted from 80 volatilities in March to just 40 in July, and the spot price repeatedly "failed to decisively break the $70,000 level." The difference this year is the new higher plateau: BTC has remained between $100,000 and $110,000 for most of the past three weeks.
The calm is visible beyond Deribit's options screens. Deribit's DVOL index, which tracks 30-day implied volatility, remains just above 40, one of its lowest readings in over two years. Realized volatility is even quieter, so even the yearly lows in implieds still seem "optically rich," argues QCP (https://www.qcpgroup.com/insights/asia-colour-125/). This valuation gap has encouraged traders to sell gamma: open interest in perpetuals has decreased and the favorite hedge fund hedging trade — long in spot through new ETFs, short in futures — has unwound, removing what QCP calls "the natural supply of volatility" from the market.
Flows in the listed options market confirm the unease. Traders report that July call options around $130,000 and $140,000 are being moved to September "in significant size," effectively pushing bullish timelines lower down the curve. Meanwhile.
