Market Wrap: Elon Taketh Away – Bitcoin Continues Fall as Options Traders Pile Into Puts

Most cryptocurrencies are down Monday, prompting a flurry of exercise within the choices markets as merchants reposition themselves amid elevated volatility.

  • Bitcoin (BTC) buying and selling round $44,211 as of 21:00 UTC (4 p.m. ET). Losing 2.8% over the earlier 24 hours.
  • Bitcoin’s 24-hour vary: $42,269-$46,462 (CoinDesk 20)
  • Ether (ETH) buying and selling round $3,376 as of 21:00 UTC (4 p.m. ET). In the purple 1% over the earlier 24 hours.
  • Ether’s 24-hour vary: $3,142-$3,587 (CoinDesk 20)

Bitcoin dumps, remainder of crypto follows

Bitcoin’s hourly value chart on Bitstamp since May 14.
Source: TradingView

Bitcoin, the most important cryptocurrency by market capitalization, was down Monday 2.8% as of press time and going as low as $42,269 round 17:15 UTC (1:15 p.m. ET). BTC was above the 10-hour shifting common and beneath the 50-day, a sideways sign for market technicians.

“Over the final three months bitcoin has been consolidating round $50,000 inside a unstable and large $45,000 to $60,000 vary,” stated Jean-Marc Bonnefous, managing companion of funding agency Tellurian Capital. “We are nonetheless in a supportive development typically however lots of individuals are already lengthy bitcoin, so that you want an increasing number of bullish information to interrupt this vary and the all-time highs.”

BTC volatility is certainly up, based on CoinDesk Research knowledge. As of Sunday, the latest day for closing knowledge, bitcoin’s 30-day volatility was over 77%, the very best since March 24.

Bitcoin’s 30-day volatility since January 1, 2021.
Source: CoinDesk Research

Greg Magadini, CEO of knowledge aggregator Genesis Volatility, additionally tracks the gyrations within the crypto market by using knowledge from bellwether derivatives alternate Deribit. Late Sunday, the DVOL nearly hit 160, by far the very best degree of variability over the previous month, based on Genesis’ charting. 

“We noticed the very best print recorded on Deribit’s ‘DVOL’ index,” famous Magadini.

Bitcoin’s DVOL Index, a measure of volatility for derivatives merchants.
Source: Genesis Volatility

“Elon Musk’s Twitter exercise and BTC’s subsequent drop decrease proved the bitcoin choices market appropriate,” added Magadini. “Now BTC possibility markets are very costly as merchants are panic-buying put choices.”

Current-day choices circulation for BTC, based on Skew, are substantiating Magadini’s case. Over 60% of choices motion have been in places, which is the correct however not the duty to promote an asset earlier than a specified expiration date.

Selling When Tesla Hasn’t

Bitcoin choices flows for Monday.
Source: Skew

Puts might probably show profitable for BTC choices merchants, however analysts proceed to be involved concerning the whims of Musk, CEO of electrical automobile producer Tesla and an more and more influential  cryptocurrency tweeter. 

“Tesla’s current determination to cease accepting bitcoin for automobile purchases, and remarks on its environmental impression, appear to have had an impression on bitcoin’s value,” stated Alessandro Andreotti, an over-the-counter crypto dealer. 

Even CNBC’s Jim Cramer has weighed in on Tesla CEO Elon Musk’s grip on the cryptocurrency market, involved the entrepreneur’s tweets appear to be a catalyst for dumps as nicely as bullish runs. 

This promoting comes regardless of Musk making it clear by way of Twitter (in fact) Sunday that Tesla has not sold any of its bitcoin holdings, reportedly value greater than $1 billion. 

“BTC nonetheless stays king within the cryptomarket,” added Andreotti. “And when it goes down, [altcoins] inevitably observe swimsuit. Everything is simply following bitcoin, in my view.”

Welcome to the brand new BTC vary: the $40Ks

Bitcoin’s historic value in 2021.
Source: CoinDesk 20

Bitcoin was buying and selling round $38,000 on Feb. 7, when Musk first tweeted about crypto concerning dog-friendly meme asset dogecoin (DOGE). BTC then went as excessive as $64,829 (a report) on April 15 however is now again to February ranges, based on CoinDesk 20 knowledge. 

So the place does bitcoin’s value go from right here?

“Indicators present that probably BTC will keep within the vary between $42,000 to $47,000,” famous investor and technical analyst Constantin Kogan. 

“The bitcoin value appears to be pushed randomly by the newest anecdotal tweet or rumor,” stated Tellurian Capital’s Bonnefous. “On the opposite hand, ether remains to be under-invested and has a stronger outlook and resilience within the shorter time period.” 

Read More: Bitcoin Suffers Biggest Pullback This Year With Drop to three.5-Month Low

ETH value follows bitcoin; name choices nonetheless favored

Ether’s hourly value chart on Bitstamp since May 14.
Source: TradingView

The second-largest cryptocurrency by market capitalization, ether (ETH), was buying and selling round $3,376 as of 21:00 UTC (4:00 p.m. ET), down 1% over the prior 24 hours. ETH went as low as $3,142 round 17:15 UTC (1:15 p.m. ET). The asset is above the 10-hour shifting common however beneath the 50-day, a sideways sign for market technicians. 

Analysts have been principally targeted on BTC Monday due to the drop within the signature blockchain asset, and a lot of the remainder of the crypto ecosystem appears to be following that development. However, Genesis Volatility’s Magadini says the derivatives markets between BTC and ETH are behaving fairly in another way. 

“Something we’ve written about in our publication for the previous couple of weeks is concerning the divergence between ETH and BTC possibility skew,” Magadini stated. “BTC had been comparatively bearish in skew regardless of costs climbing barely increased whereas ETH had a screaming bullish skew.”

ETH choices are nonetheless trending bullish: While over 60% of bitcoin choices are places, 55% of ether choices are calls, primarily based on Monday’s possibility market flows. Calls are the correct however not the duty to purchase an asset earlier than a particular expiration date – and can be utilized by merchants to guess on upside.

Ether possibility flows for Monday.

The ETH/BTC buying and selling pair, provided on most spot crypto exchanges, displays the power of 1 asset over the opposite. When the pair is up, it reveals merchants are promoting BTC for ether. When the pair is down, buyers are dumping ETH for bitcoin. While the pair did hit as excessive as 0.082 BTC on May 15, it’s now in a downtrend since that zenith.

The ETH/BTC pair on Coinbase in 2021.
Source: TradingView

“ETH had seen sturdy efficiency relative to bitcoin,” stated Jason Lau, chief working officer of San Francisco-based alternate OKCoin. “ETH/BTC was as much as 0.08 BTC, a degree not seen since Jun 2018.”

ETH/BTC is down nearly 1% on Coinbase Monday. 

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Other markets

Digital belongings on the CoinDesk 20 are combined Monday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

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  • Oil was up 1.3%. Price per barrel of West Texas Intermediate crude: $66.33.
  • Gold was within the inexperienced 1.3% and at $1,865 as of press time.
  • Silver is gaining, up 2.8% and altering palms at $28.18.
  • The 10-year U.S. Treasury bond yield climbed Monday to 1.647 and within the inexperienced 1%.

The CoinDesk 20: The Assets That Matter Most to the Market

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