SignalPlus Volatility Column (20240722): Biden Withdraws

Early yesterday morning, U.S. Democratic presidential candidate Biden suddenly announced his withdrawal from the race on Twitter, causing a stir in the crypto market. BTC briefly dropped below 66,000 but quickly regained all losses, climbing to just below the 68,500 resistance level before the Asian market opened, showing a V-shaped reversal. Analysts have differing opinions on this event; some believe Biden's withdrawal increases Trump's chances of winning, considering Trump's previous statements about potentially using Bitcoin as a strategic reserve and other pro-crypto remarks, which could positively impact coin prices. Others point out that since the riots on January 6 this year, public trust in Trump has weakened, and his current opponent is Kamala Harris. Although his chances remain high, the threat from the new candidate is significant compared to the overwhelming gap he had against Biden. As the initial excitement fades, Trump's prospects of winning seem a bit unclear again. Nevertheless, we are seeing the impact of this year's U.S. political situation on coin prices gradually intensifying, and any further actions from either party could affect short-term price movements.

Source: TradingView

On the macro front, this week sees the release of major indicators such as manufacturing/services indices, GDP, and PCE. Given the upcoming FOMC meeting next week, this week's data is crucial.

Source: SignalPlus, Economic Calendar

In terms of options, implied volatility has shown a general upward trend recently. Due to poor liquidity over the weekend, the latest news event has caused even more pronounced IV fluctuations. The term IV Curve reveals some market perspectives; for BTC, the Bitcoin 2024 conference scheduled for this month from the 25th to the 27th has become the focus of attention, with presidential candidate Trump set to speak as the keynote guest. The market has priced in a high degree of uncertainty, resulting in a higher Vol Premium for the expiration date of August 2, 2024, after the conference. For ETH, the eagerly anticipated spot ETF, originally set to begin trading on July 23, has led to a significant flattening of front-end IV, rising to a high of 70% Vol.

Source: Deribit (as of May 2, 16:00 UTC+8)

Source: SignalPlus

Data Source: Deribit, overall ETH trading distribution / 26 JUL 24 trading distribution

Data Source: Deribit, overall BTC trading distribution

Source: Deribit Block Trade

Source: Deribit Block Trade