🌐Volatility surges as US election day approaches, bullish sentiment in crypto markets📈
QCP Capital's latest analysis shows that as election day approaches, short-term implied volatility in the options market has also risen, a full 10 volatility points higher than the previous expiration date.
Meanwhile, although the price of Bitcoin is currently 8% below its all-time high, investors are still more interested in call options than put options, showing that the market as a whole is still optimistic.
Meanwhile, the stock market is in a completely different situation. The S&P 500 has hit a record high, and nearly 20% of companies are about to report third-quarter earnings.
Currently, the options market is more inclined to buy put options for protection, as it is widely expected that the index may fluctuate by as much as 1.8% on November 6, the first day after the election. This shows that investors are preparing for possible market turmoil in case of large price fluctuations after the election results are released.
More interestingly, the correlation between the stock market and cryptocurrencies has now reached an all-time high of 0.83. Given that this correlation usually reverts to the mean, coupled with the different positioning of the options market, this could signal that the market is about to usher in a turning point.
It is worth celebrating that the election results are a zero-sum game for the stock market, and different industry winners will depend on who ultimately wins. But no matter who wins, both candidates are friendlier to cryptocurrencies than the previous administration, which means that if there is weakness in the stock market, funds may turn to the cryptocurrency market.
🤔 So, what do you think? Do you think the election results will affect your decision to invest in cryptocurrencies? How will this high correlation between the stock market and the cryptocurrency market change your investment strategy? What is your next plan in this market full of uncertainty and opportunities?
