Key Points
- Bitcoin’s STH MVRV valuation indicator is at a pivotal point ahead of Trump’s inauguration.
- Options traders increase hedging activity, expecting wild price swings around the event.
Bitcoin [BTC] is currently at a significant juncture, with Trump’s presidential inauguration looming on 20 January. Additionally, a crucial valuation indicator, the STH (short-term holders) MVRV, has also reached a critical point.
Prospects of a ‘Trump Pump’
At the moment, the STH’s realized price is valued at $86k. If the STH MVRV level is considered, this could potentially trigger a bullish surge for BTC, as per CryptoQuant analyst Axel Adler. Adler stated that if demand remains steady until Trump’s inauguration, the STH RP could potentially rise to $90K. He further added that if the president fulfills even some of the promises made to voters, it could serve as a strong bullish trigger.
However, if BTC’s price drops below the STH cost basis, which is currently at $88k, it could indicate a prolonged downtrend or price consolidation for BTC. According to Glassnode, if the price stabilizes below this level, it can signal a decrease in sentiment among new investors, often a turning point in market trends.
Options Market Activity
On the Options market, traders have been pricing in a negative to slightly bullish outlook before and after the inauguration. This is reflected by the 24-hour change in the 25RR (25-Delta Risk Reversal). For the 31 January expiry, the 25RR was slightly positive at 0.31, indicating a slight premium for calls (bullish bets). In simple terms, Options traders are preparing for wild price fluctuations and potential drops before the event and some stabilization afterwards.
