Crypto market will be calm before US election: analysts

Bybit and Block Scholes report a calm crypto market leading up to the U.S. election, with bullish sentiment despite lower short-term volatility.

A new report from Bybit and Block Scholes, shared with crypto.news, highlights a calm crypto market in the weeks leading up to the U.S. election, with lower short-term volatility but an overall positive outlook. 

According to the report, traders are positioning themselves ahead of the election, indicating bullish sentiment, even as implied volatility for short-term options has fallen.

Implied volatility measures how much price movement traders expect in the future. Regarding 7-day options, the report noted a sharp drop, suggesting less anticipated movement in the immediate term.

Volatility after the election

However, the market shows a steep term structure, meaning volatility for options that expire later, such as 14-day options, is higher. This reflects traders’ focus on the election and the potential for significant market changes afterward.

Funding rates, which show the cost of holding positions in futures contracts, remain positive across all tokens, not just Bitcoin (BTC) and Ethereum (ETH). 

Positive funding rates often indicate that more traders are betting the market will rise. Bitcoin call options, which give traders the right to buy BTC at a set price, dominate open interest, further emphasizing a bullish outlook.

The report suggests that while the market is calm for now, significant movement could occur after the election, with Bitcoin potentially breaking the $70,000 mark after November.