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Bitcoin’s recent weakness has been driven largely by U.S. market sentiment, underscoring its continued behavior as a “risk-on” asset. Meanwhile, volatility is rising as institutional flows shift toward venues like IBIT and Deribit. With gold surging and showing record volatility, the growing divergence between BTC and gold may present a compelling trading opportunity. Learn more in this week's Amberdata Derivatives newsletter:
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Disclaimer: Nothing here is trading advice or solicitation. This is for educational purposes only.
Authors have holdings in BTC, ETH, and Derive and may change their holdings anytime.
- Thursday 10:00a - Existing Home Sales
- Friday 8:30a - CPI
- Friday 10:00a - New Home Sales
*Various Fed Governors Speak throughout the week*
BTC: $109,239 (-4.1% / 7-day)
ETH: $4,005 (-2.6% / 7-day)
SOL: $189.89 (-2.4% / 7-day)
Crypto Options Overview
The Bitcoin weakness seen since October 10th, has really been lead by US markets (no surprise given the Trump/China tweet) but it’s an important observation that supports the notion that Bitcoin still trades as a “risk-on” asset right now.
We can see the trading returns by geographical trading session (above) highlighting the US led weakness.
US equities were showing a lot of volatility last week with the VIX spiking as high as 29.00 on a move that has only sent stock from 6800 → 6550, a -3.67% range. This is far from a 20% “bear market” drop.
Bitcoin volatility has woken up a bit after a persistent decline as IBIT options rival Deribit to be the main Crypto Volatility venue of choice.
Again, this highlights the impact of US institutional adoption and flows. We need to keep this in mind to help trade these markets as the investor/HODLer base for Bitcoin evolves.
50% volatility is around the 75th percentile for 30-day realized (over the past 12months).
The current long-term 180-day ∆RR-Skew has rally been this negative, only exceeded by the FTX bankruptcy in November 2022.
This is really setting us up for a great trade opportunity in my mind.
Selling OTM puts (willing to take assignment) and using the proceeds to by far OTM call spreads.
The reason I like this trade is because of the “Digital Gold” narrative. I believe BTC will transition to this value proposition in the future (away from a risk-asset).
Gold is telegraphing massive structural changes.
Gold is outperforming equities in a year when equities have rallied +13.50% YTD and consistently made new ATHs.
Gold volatility is at a 15yr peak!!! GVZ is currently 31%
The Gold trend seems unbreakable right now, this is the type of asset that can reach prices that are hard to predict and beyond imaginable.
How do we call a “top” on the value of global hard money?! And by that logic, BTC will likely transition into a pure digital gold narrative.
Being able to capture the volatility divergence from BTC and GOLD as BTC gets liquidated by risk-asset investors… is the play to scale into in my opinion.
Paradigm Top Trades this Week
BTC Cumulative Taker Flow
ETH Cumulative Taker Flow
BTC Cumulative OI
ETH Cumulative OI
BTC
ETH
Derive is now available on Coinbase in selected regions
Deribit’s former CMO has joined Derive!
Portfolio margined accounts can now support 256 instruments (up from 128)
Dhedge, a decentralized asset management fund, is now executing trades on Derive!
Derive’s RFQ is now available through Liquid Mercury!
AMBERDATA DISCLAIMER: The information provided in this research is for educational purposes only and is not investment or financial advice. Please do your own research before making any investment decisions. None of the information in this report constitutes, or should be relied on as a suggestion, offer, or other solicitation to engage in, or refrain from engaging, in any purchase, sale, or any other investment-related activity. Cryptocurrency investments are volatile and high risk in nature. Don’t invest more than what you can afford to lose.
