Bitcoin Price Outlook Post-U.S. Election

Derivatives traders are positioning for a bullish trajectory for bitcoin after the U.S. election on Nov. 5, says Deribit CEO Luuk Strijers. He noted that data reveals twice as many bitcoin call options compared to put options set for the Nov. 8 options expiry—the first expiry following the presidential election.

Options Expiry Details

For the Nov. 8 options expiry, the Open Interest exceeds $2 billion, with dominant strike prices at $70,000, $75,000, and $80,000. The put-call ratio stands at 0.55, indicating a greater number of calls than puts outstanding. Strijers mentioned the forward implied volatility is at 72.29%, suggesting a potential price swing of about 3.78% in the days post-election.

Increased Implied Volatility

Strijers provided charts showing the term structure for bitcoin options, indicating both marked implied volatility (Mark IV) and forward IV across future dates. He noted a clear increase in Forward IV compared to Mark IV, particularly during election week, suggesting traders expect higher volatility.

Despite the elevated volatility, the peak is anticipated to be short-lived, with negative 25 Delta Skew (put-call), signaling the market expects larger upside movements. Strijers emphasized strong demand for call options as investors prioritize potential gains over managing downside risks.

Optimism Post-Election

The bullish sentiment among derivatives traders was echoed by Arbelos Markets CEO Joshua Lim, who observed an uptick in participants purchasing call options for the $70,000-$80,000 strike prices after the election. He noted a mix of month-end systematic selling by yield-seekers and a trend to buy cheaper post-election call options, indicating expectations of a price breakout despite global market uncertainties.

Lim observed a shift towards buying call options in the $70,000-$80,000 range while selling those above $100,000, as the market anticipates a decrease in implied volatility post-election.

In addition, Lim highlighted that bitcoin is seen as both an inflation hedge and a proxy for the U.S. presidential election, particularly if Donald Trump wins. He mentioned the options market is pricing a 7% move on election day, which may be underestimated given bitcoin's correlation with risk assets.

Standard Chartered’s Geoff Kendrick expressed similar optimism, predicting that bitcoin could approach its all-time high of over $73,000 on Nov. 5. This forecast is based on an analysis of bitcoin derivatives and trading volume indicators. Kendrick explained that daily bitcoin volumes and popular strike levels help estimate post-election price movements, with his base case projecting a bitcoin price of around $73,000 on election day.