Key Points
- Uncertainty surrounding U.S. Bitcoin reserves capped Bitcoin’s recent upswing.
- The options market suggests extended price swings for Bitcoin in the next 48 hours.
Bitcoin experienced fluctuating moves during the inauguration day, peaking at $109.5K before dropping to $100K. The market showed cautious optimism after the inauguration, with BTC Options analyst Tony Stewart highlighting the potential for volatility for the January 21st expiry.
The attached chart showed that the Implied Volatility (IV) was almost 100% for the 21st of January Option expiry. This suggested increased uncertainty and possible price fluctuations following the inauguration.
Bitcoin’s Implied Volatility
At the time of writing, the IV had decreased to 71%, while the highest IV was 77% for Wednesday’s Options expiry. This indicated potential price swings in the next 48 hours.
Despite the uncertainty, there was a premium for call options (bullish bets), as shown by the positive 25-Delta Risk Reversal (25RR).
U.S. Bitcoin Reserve Uncertainty
The market’s nervousness might have been sparked by the absence of crypto in President Trump’s first-day executive orders. Just before the event, Polymarket’s odds of U.S. BTC reserve in the first 100 days rose to 48%, pushing BTC’s price to a record high of $109K.
However, the odds fell to 32% later as it became evident that crypto was not a priority, at least on the first day in office.
David Bailey from Bitcoin Magazine speculated that an executive order for a Strategic Bitcoin Reserve (SBR) could be possible within 100 days. However, he said that the legislative framework might extend until the mid-term elections.
The BTC price fell below $108K but stayed above key moving averages near $100K, indicating strength despite U.S. SBR uncertainty. If it falls below the averages, BTC could drop to $94K or range-lows at $90K.
But, a strong upswing could make $120K attainable, particularly with positive updates on U.S. SBR prospects.
