Key Points
- Bitcoin’s recent price swings are influenced by uncertainty surrounding U.S. BTC reserves.
- Options market indicates potential extended price swings in the next 48 hours.
Bitcoin, also known as BTC, recently experienced a series of price fluctuations. This was reportedly due to the uncertainty surrounding the U.S. BTC reserves.
During the inauguration day, BTC hit a new high of $109.5K before dropping back to $100K. The market seemed cautiously optimistic following the inauguration.
Options Market Indicates Potential Price Swings
BTC Options analyst Tony Stewart highlighted the expected volatility for the January 21st expiry, stating that the inauguration speech didn’t seem to be the focus. Instead, the market was still wary of expected volatility.
The Mark IV (Implied Volatility) was almost 100% for the 21st of January Option expiry. This indicated increased uncertainty and potential price swings post-inauguration. However, at the time of writing, the IV had fallen to 71%, with Wednesday Options expiry having the highest IV at 77%. This suggested potential price swings in the next 48 hours.
U.S. Bitcoin Reserve Uncertainty
The market’s nervousness could have been triggered by the absence of crypto in President Trump’s initial executive orders. Before the event, Polymarket’s odds of U.S. BTC reserve in the first 100 days rose to 48%, driving BTC’s price to a record high of $109K. However, the odds fell to 32% afterward when it became clear that crypto was not a priority, at least on the first day in office.
David Bailey of Bitcoin Magazine speculated that an executive order for a Strategic Bitcoin Reserve (SBR) might be likely within 100 days. However, he also suggested that the legislative framework could extend until the mid-term elections.
Despite the uncertainty surrounding U.S. SBR, BTC’s price remained above key moving averages near $100K. If it falls below the averages, BTC could drop to $94K or range-lows at $90K. However, a strong upswing could see $120K as reachable, especially with positive updates on U.S. SBR prospects.
