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volatility

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Two Prime CEO: Bitcoin's rebound still has room, and the short covering of volatility will provide additional momentum

According to CoinDesk, Alexander Blume, founder and CEO of the cryptocurrency asset management company Two Prime, stated that Bitcoin's recent rebound still has room to grow, mainly because institutional investors who have sold volatility are facing position pressure. If the price continues to rise, short sellers being forced to cover their positions will further fuel the upward trend. He pointed out that the current market structure is healthy, with funding rates not showing signs of overheating. The rebound is not driven by speculation, and the continuous inflow of spot ETFs and corporate buying provides substantial support.Although implied volatility has risen from 23%-24% to over 40, it remains low by historical standards. If call option sellers are forced to close their positions, it could accelerate the upward movement. Blume believes that if the macro environment stabilizes, BTC has already formed a bottom around $60,000, with the biggest risk coming from a complete collapse of risk assets. The generally pessimistic market sentiment means that even moderate positive news could have an outsized impact.On the mining front, MARA recently chose to collateralize its BTC holdings to obtain a $600 million loan from Coinbase and Two Prime, rather than selling directly, in order to retain upside potential. Mining companies are diversifying their AI transformation strategies, with Cipher Mining and TeraWulf actively shifting towards AI infrastructure, while CleanSpark and MARA explore AI and power sectors while maintaining their original businesses. Blume expects the Trump administration to push for interest rate cuts, and adjustments to the PCE index may lower inflation readings, which could improve interest rate prospects.

first_img $6.4 billion Bitcoin options expire on Friday, which may exacerbate market volatility

According to CoinDesk, approximately 81,700 Bitcoin options contracts (with a nominal value of about $6.4 billion) on Deribit will expire on Friday at 08:00 UTC. The number of call options exceeds that of put options, with a put/call ratio of 0.83, and the maximum pain point is at $68,000. The $80,000 strike price holds $157 million in nominal value of call options, while the $75,000 strike price has the largest open interest in call options, reaching $236 million.Shaun Fernando, Chief Risk Officer of Deribit, stated that nearly 20% of Deribit's Bitcoin open contracts are about to expire, combined with factors such as severe market volatility, the volatility term structure shifting from backwardation to contango, a relative increase of 30% in DVOL, and a shift from negative to positive skew in call-put options, this will be a "noteworthy expiration date." Bitcoin surged from about $62,000 to $80,000 within a week, marking the second-largest weekly gain in years, with a large number of call options with strike prices below $80,000 entering in-the-money status.Fernando pointed out that over $500 million in nominal value is within a 5% volatility range of the current price, which may trigger more intense gamma hedging before expiration, leading to a "pinning" effect around key strike prices or accelerating a breakout beyond these levels. Dynamic hedging conducted by market makers to manage exposure may cause Bitcoin prices to fluctuate around dominant strike prices like $80,000, and once a decisive breakout occurs at that level, it could trigger a larger market movement.
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