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Bitcoin 
$105,584, the leading cryptocurrency, found itself wedged in the price range of $107,000 to $110,000 ahead of the Bitcoin Conference in Las Vegas, which kicks off today and runs through May 30. Despite continued institutional interest through spot ETFs, short-term implied volatility remained elevated. Defensive strategies were established at the derivatives desk. Meanwhile, funding rates normalized, and open positions on futures declined. The market’s attention primarily focused on potentially headline-grabbing statements from speakers like JD Vance, Michael Saylor, Donald Trump Jr., and Eric Trump.
Bitcoin Price Stagnates as Las Vegas Event Approaches
Last week’s macroeconomic data buoyed stock markets, yet Bitcoin’s volatility remained constrained. While bond yields in the U.S. exhibited decreased volatility, steady inflows into spot ETFs kept Bitcoin’s price tightly bound within its current range. Analysts shared the sentiment that investors are reluctant to place large bets until after the speeches conclude.
Expectations of unexpected upward or downward movements in Bitcoin price remained. This uncertainty sustained demand for short-term options. In the Chicago options market, one-week straddle volatility hovered around 55%, with the forward curve skewing sharply backward.
This situation mirrors what unfolded during the July 2024 Bitcoin event in Nashville. At that time, implied volatility spiked above 90% just before former U.S. President Donald Trump’s speech, only for a subsequent rally to yield strong profit-taking, leading Bitcoin to plummet nearly 30% in two days. Although a similar scale sell-off is not likely today, the memory remains vivid. As a result, professional traders are moving towards “protective put” strategies rather than “strangle” approaches to hedge against downside risks.
Anticipating Volatility from Trump’s Influence
Messages from members of the Trump family, along with Senator JD Vance, are anticipated to touch on cryptocurrencies in the context of the upcoming U.S. elections. Despite the denial of last week’s rumors about Trump Media seeking a $3 billion cryptocurrency fund, the mere talk roiled the options market, showcasing the market’s sensitivity to statements. Notably, the reduction in open positions by James Wynn, known for high-beta investments, underscores the cautious sentiment.
On the technical analysis front, the region below $107,000 is rife with stop-loss orders in the futures markets. Nevertheless, as this area marked the recovery threshold since March, bargain hunters remain vigilant.
Most investors believe that short-term volatility will swiftly collapse, and risk premiums will erode once the conference’s presentation schedule concludes. With reduced pressure on options curves, it’s not surprising if Bitcoin’s price shifts to the $110,000 to $113,000 range afterward. However, the market remains in a “wait-and-see” mode. Moreover, a breach without volume is unlikely to create lasting trends.
