Analysis: Expectations for market volatility reach a peak ahead of the U.S. elections

PANews reported on October 14th, according to Matrixport's latest weekly report, fluctuations in macroeconomics and market sentiment have led global funds to flow back into traditional financial markets, exacerbating the downward pressure on crypto assets. U.S. stocks linked with non-agricultural data drove BTC's short-term rise, but as a risk asset, BTC adjusted with U.S. stocks.

Tokens of small and medium market value performed better than BTC, showing that the crypto market still has high speculation during the fund return period. BTC fluctuated near $60k USD with significant selling pressure and has not yet formed a stable upward trend. ETH demand is weak; despite support from decentralized applications its price performance is inferior to BTC.

The rising uncertainty in the global economy drives an increase in volatility in the options market as institutions use options to hedge against market risks. Before the US election in November, expectations for volatility reached their peak in the options market as institutions sought to avoid dramatic fluctuations through early planning.

The launch of Bitcoin ETFs has invigorated the crypto options market where institutions tend towards profiting from volatility trading. Crypto arbitrage opportunities are decreasing as funds turn towards traditional financial markets causing liquidity tension; thus making volatility trading an important strategy.