With halving just days away, the crypto community collectively holds on to its proverbial hats and counts down the days until the historic event takes place. Looking back, it is quite amazing to see what has been achieved in the last four years since the last halving and how much the industry has matured.
Regulation has taken giant steps, the stages have become more sophisticated and transparent, and institutions have begun to dip their fingers into the once murky waters of the cryptoshops. Along with a reduced supply, all conditions are perfectly aligned for an upward movement after halving, and that is exactly what many cryptomone enthusiasts are waiting for.
A notable proponent of such a result for halving is PlanB, the anonymous analyst behind the famous stock-to-flow model. In a recent tweet about the event, PlanB expects Bitcoin’s price to increase tenfold over the next two years, showing that their model can predict the long-term direction of BTC’s price.
Forget the hype, here’s the data
With the Bitcoin price rally approaching halving and the crypto community being generally optimistic about the upcoming event, others are taking a more sober stance on the price action after halving, given all the hype surrounding the specific date being an event where people „buy the rumor and sell the news“.
As the price rises in the days leading up to the halving, it is possible for traders to make profits immediately after the event. So what do you do with all this? Supply and demand is just one of the things to consider, and is, of course, the mainstay of long-term valuation, but short-term price volatility does not adhere to that logic, as fear, greed, and other man-made factors come into play.
Data on derivatives can be extremely insightful, as more complex instruments, such as option contracts, produce data sets that simply do not exist in spot markets. As such, here’s a closer look at Bitcoin’s option data to shed some light on the situation.
Being a highly complex market, Bitcoin options market Bitcoin Method, Bitcoin Formula, Crypto Cash, Cryptosoft, Ethereum Code participants are often considered the most informed players, and the data sets produced by this complex market can shed light on where these experienced traders think the price will go after halving.
Implied Volatility: Are the charts changing?
For example, the implied volatility metric can tell a lot about the expected price of Bitcoin within the options market. When there is a higher premium for a certain strike price on an option contract, it means that there is a greater demand for these contracts. Data from the largest option market, Deribit, shows that option market players think that the risk of a fall is greater than the potential for a rise.