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Developments in the crypto market continue to attract attention. Following Bitcoin’s drop below $50,000, a significant Bitcoin volatility indicator reached its highest level in 20 months, and futures traders now believe Bitcoin’s price could fall further. Meanwhile, crypto investor Yoddha stated that this could be the best buying opportunity of 2024.
What Is Happening with Bitcoin?
The Bitcoin Volmex Volatility Index reached 97.14 on August 5, when Bitcoin briefly fell to $49,813, according to CoinMarketCap data. This is the highest level since November 2022, the month when the crypto exchange FTX went bankrupt.
Bitcoin has recovered since trading at $56,676 at the time of publication, but future investors still predict further declines. Ed Hindi, Chief Investment Officer at Tyr Capital, commented on the matter:
“Investors are aggressively buying puts and put spreads in both Bitcoin and Ethereum to protect their positions from further declines.”
Details on the Matter
The put-call volume ratio measures the demand for Bitcoin’s put (sell) and call (buy) options. According to CoinGlass data, it currently stands at 46.94% call and 53.06% put in the last 24 hours, resulting in a put-call ratio of 1.13. Hindi commented on this:
“Put skew is extremely well bid. This could be a sign that the market is overextended. Whether we trade there depends on how far we are from the end of the JPY carry trade pullback. We believe we are nearing the end.”
However, another metric, Bitcoin options volume, dropped by 39.73% within 24 hours on August 6, indicating that future investors are uncertain about Bitcoin’s price direction. During this period, not all investors expect a prolonged decline. Others anticipate sideways price movement and even a near-term recovery. RektProof commented on the matter on August 6:
“Aggressive selling assumes the price will pause for a while and give us a range. Expect a major reversal soon.”
