Bitcoin Volatility Spikes!

In this week's Crypto Insight I discussed...

The recent spike in Bitcoin volatility and how the best opportunity right now may be to sell June expiry options rather than buying the dip in BTC.

After Elon musk’s recent tweet storm, crypto markets have experienced the sharpest drawdown of the year so far. Due to large liquidations at Deribit the leading crypto options exchange, the implied volatility curve has spiked dramatically to what loo like unsustainable levels. We favour selling VEGA to play the mean reversion of this implied vol back down to more normal levels once BTC prices stabilise over the next couple of weeks.

ETH/BTC spread has reached important long term levels and may be due to pause as markets work through this recent bout of volatility. However the ETH narrative remains very strong into July with the coming update and so we may see this resume fairly soon. A one to two week consolidation would be welcome and provide a good base for ETH to build next leg higher. I am monitor ng the upside calls for good value opportunities.

Filmed on on Tuesday 18th May 2021.

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