As the speech of the president of the Federal Reserve, Jerome Powell, in Jackson Hole, the key question in everyone’s mind is approaching: How volatile could Bitcoin? become?
The answer points to moderate volatility, not to the extreme changes that could suggest generalized attention in the event.
“BTC options are priced at approximately a ± 2.0% movement in Jackson Hole’s speech from Powell,” Goyal’s Cointend Pulkit, Crypto Market Maker Orbit Markets, told Coindesk Puckit Market. Orbit specializes in structured encryption and derivative options.
Merchants use the price of options with different raffle prices and maturities and implicit volatility and Greek options to measure an expected range of price movement. Implicit volatility refers to market expectation on how much the underlying asset is expected to move in a specific time frame.
Implicit Volatility Index of Volmex Day (Bviv1d) It has increased to 49% annualized from writing, the highest since May 26, according to Data Source TrainingView. That is equivalent to a 24 -hour price swing of 2.5%. That is slightly higher than the average daily movement of 1.18% in the last 30 days.
Keep in mind that volatility is the-agnostic direction, which means price swings insinuated by options and implicit volatility rates can be developed in any direction.
That said, the downward volatility seems more likely in case Powell sounds balanced, contrasting generalized expectations for rates cutting clues. Some merchants have been collecting sales options preparing for such a result.
“If your tone leans more balanced than Dovish, the markets could see a setback, which has driven the demand for downward protection. The bias tells the story: the risk reversions of 25 delta of the night are currently 6 vols in calls,” Goyal told Coindesk.
Powell is expected to speak Friday morning at the Annual Economic Policy Symposium of Jackson Hole of the Fed.
