The Bitcoin market is in a state of uncertainty, with signs pointing towards a potential sharp move in either direction. Traders are weighing both technical and geopolitical factors that could act as catalysts for a sudden shift in momentum.
On-chain activities in the Bitcoin options market and the high-profile meeting between U.S. President Donald Trump and Russian President Vladimir Putin later today could determine BTC’s next major price movement.
Reduced Activity in the Bitcoin Options Market
The blockchain intelligence platform Glassnode cited on-chain activities within Deribit, a renowned crypto options trading platform that Coinbase recently acquired.
Glassnode shared a chart showing a significant decline in Deribit’s Bitcoin DVOL index, an indicator that measures the expected (implied) volatility of Bitcoin options traded on the crypto options exchange.
The metric shows most Bitcoin options traders are avoiding downside hedges, signaling overconfidence in market stability. This is a sign they expect calm conditions and may be underestimating the risk of sudden market swings.
Past DVOL lows have often been followed by sharp BTC price moves, both upward and downward. Such calm periods often give way to volatile breakouts in either direction. Interestingly, BTC is already showing signs of short-term movement. Recall that the asset attained a new all-time high (ATH) of $124,450 less than 48 hours ago, but has since dropped to $119,000.
In an earlier tweet, Glassnode highlighted the potential danger of such lax behaviour involving implied volatility.
“Historically, such suppressed volatility often precedes sharp moves, as traders tend to underprice risk before major market shifts,” the blockchain intelligence platform explained.
If history repeats itself, bitcoin will likely see a severe price downturn if the crypto market leans toward the bearish side. Conversely, a bullish streak may send BTC closer to its peak value or higher.
With volatility metrics at historic lows, the Bitcoin market is primed for a sharp reaction to any unexpected catalyst. Such catalysts can come from economic data, market-specific events, or even major geopolitical developments. One such potential trigger is unfolding on the political stage today.
Trump-Putin Summit
Later today, U.S. President Donald Trump is set to host Russian President Vladimir Putin in Alaska to discuss the possibilities of a ceasefire regarding the three-year-long war between Russia and Ukraine. Notably, this would be the first time that a Russian president has visited Alaska.
It is no surprise that political events often affect bitcoin’s price. Hence, the outcome of this summit could determine whether BTC will see higher price levels or experience a price tumble.
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