Optimism for Bitcoin Increases but Market Hesitates

Optimism for bitcoin has surged since Fed Chair Jerome Powell’s Jackson Hole speech last Friday. However, derivatives data shows lingering market hesitation, according to analysts.

“While the move higher in the bitcoin price has been decisive since Fed Chair Jerome Powell’s speech, the implied volatilities are indicating hesitation in the market, as front-end vols have drifted lower,” noted QCP Capital analysts. They predict that bitcoin will likely continue trading within a tight range of $62,000 to $67,000 in the near term.

Fed’s Dovish Tones at the Jackson Hole Symposium

Since U.S. Federal Reserve Chair Jerome Powell’s dovish comments at the Jackson Hole Symposium, QCP Capital analysts have observed aggressive call spread buying, particularly for longer-term options.

Following Powell’s assertion that “the time has come for monetary policy to adjust,” derivatives data indicates that investors are preparing for potential price increases, which reflects growing optimism about bitcoin’s future performance in a favorable monetary environment. However, QCP Capital analysts emphasized that the data suggests derivatives traders do not foresee imminent bitcoin price appreciation.

“We have witnessed heavy selling of calls around the $100,000 strike out to March 2025, and this could mean that the market is bullish but not expecting a blow-out move so soon,” they explained.

Monday’s QCP Capital report revealed that bitcoin implied volatility is currently more skewed for puts than calls until October expirations. If this trend continues, it suggests the market is hedging for potential price drops in the near term.

“This is surprising given the overwhelmingly bullish sentiment and it possibly indicates that the market was well positioned for this move and was very quick to take profit by selling calls,” the analysts remarked.

Bitcoin (BTC) has decreased by around 1.5% in the past 24 hours, now trading at approximately $63,239, according to The Block’s Price Page.