Bitcoin (BTC) options markets hit a six-month low for the first time since early March as the drama over the US debt ceiling continues.
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The trend is set to six months and call options, which is the difference between investors willing to pay for bullish put options and unsettled put options expiring in 180 days, fell to -1, the lowest value since March 13, according to data from leading cryptocurrency exchange options compiled by Amberdata.
Put options are a type of option that increase in value as the price of the underlying asset falls. This gives the holder the right, but not the obligation, to sell the asset on a certain date at a certain price, effectively allowing them to bet against what the asset calls the option.
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One-week and one- and three-month trends also showed preference for put options. Progress stands with recent movements in the S&P 500 market showing traders pay for the volatility of put options.
Perhaps traders in traditional and cryptocurrency markets are starting to hedge against the risks of the US debt ceiling, as Congress is having a hard time reducing the debt ceiling from $31.4 trillion to less than one. obligations.
Growing uncertainty over the debt ceiling negotiations is also hitting the bond market, where one-month yields are at record highs above 6%, according to data from the TradingView charting platform. Rating agency Fitch has placed the United States on credit watch for a possible mid-term debt settlement.
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The 10-year yield rose more than 30 basis points to 3.76% this month, reaching its highest level in more than two months. For its part, the US dollar recovered ground and pushed the dollar index above 104.00, a monthly appreciation of 10%, and bitcoin fell 10% to US$ 26,260.
The first minutes of the May meeting of the Federal Reserve (H, because of its acronym in English) on Wednesday confirmed the expectation of another interest rate hike next month, according to ING.
“Macro continues to dominate,” Markus Thielen, head of research and strategy at cryptocurrency service provider Matrixport, said Thursday in a note to clients.
According to Thielen, cryptocurrency investors should closely monitor the 10-year Treasury yield.
“On May 15, 2023, the 10-year Treasury yield was above 3.5%, and bitcoin prices fell by a thousand points. Investors are now patiently waiting for the upside to lose its momentum before buying cryptocurrencies again,” added Thielen.
Article edited by Shaurya Malwa and translated by Natalia Paulovsky.