Is the options market expecting a drop?
Normally, when traders expect the market to move higher, demand for call options increases and they become more expensive.
Right now, we are seeing the opposite: the market is rising, while calls are historically cheap. Their implied volatility has fallen to around 23% - an all-time low.
This does not necessarily mean traders are aggressively hedging for downside.
It simply shows that the options market does not believe in a strong upside move and is not willing to overpay for calls.
In other words, price is going up - but expectations remain very cautious.
#CryptoMarkets
Normally, when traders expect the market to move higher, demand for call options increases and they become more expensive.
Right now, we are seeing the opposite: the market is rising, while calls are historically cheap. Their implied volatility has fallen to around 23% - an all-time low.
This does not necessarily mean traders are aggressively hedging for downside.
It simply shows that the options market does not believe in a strong upside move and is not willing to overpay for calls.
In other words, price is going up - but expectations remain very cautious.
#CryptoMarkets