Bitcoin options experience abnormal selling over the weekend

According to Deribit Insights, in the span of eight minutes, a large swath of medium-dated out-of-the-money call options were sold over a broad range of strike prices. This had the effect of dramatically reducing the implied volatility across all maturities. One twitter user provided the following chart demonstrating the “seismic shift.”

Why it matters

• Leading into the halving, the popular narrative is that it will provide the catalyst for the next bull-run. For traders looking to exercise that belief, call options present a high-risk high reward means to take that position and wIth the implied volatility dropping, it is now much cheaper to do so.
• Following Black Thursday’s sell-off, open interest in bitcoin options dropped substantially. However, with the upcoming halving lined up amidst an uncertain macroeconomic backdrop, there are strong cases for dramatic swings in bitcoin’s price on both sides which could lead to increased interest in the options market.

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