Digital assets markets pull back, but crypto options signal long-term trader optimism

CRYPTOCURRENCY markets pulled back further overnight as Bitcoin failed to hold its push toward the $70k mark earlier in the week.

The market-cap leader is trading around $66,800 this morning, down roughly 1% over the last 24 hours, and it has pared most of its gains over the past seven days.

Ethereum is facing deeper losses, down by 1.7% overnight, with altcoins following a similar pattern.

Fantom, among others, experienced more severe declines as market-wide selling pressure intensified. Sentiment indicators such as the Fear and Greed Index reflect a more cautious market mood following Bitcoin's failed breakout, while technical momentum oscillators also signal a cooling off.

However, options traders appear to remain optimistic about Bitcoin's longer-term prospects, with many betting on new all-time highs by the end of November after the US elections on 5 November - a trend supported by data from options trading platform Deribit.

How does this work? If an investor bought call options for Bitcoin at $80,000 in November, they have the right (but not the obligation) to buy Bitcoin at that price before the option expires. Say the price rises above $80,000 before the option expires, the investor could benefit by buying Bitcoin at the lower price of $80,000 and potentially selling it at a higher market price.

As we approach the end of October, traders are left wondering whether this choppiness will persist until the elections, or if Uptober can still deliver a late-month rally.

In the Markets

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Total crypto market cap

$2.31 trillion (-1.27%)

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What Bitcoin did yesterday

Daily high $67,815 |  Daily low $66,609

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Bitcoin market capitalisation

$1.32 trillion (57.29% of market)

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Bitcoin 24-hour trading volume

$29.19 billion (-21.08%)

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SP500

-0.04%

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Fear and Greed Index

Neutral

‍Source: Coinmarketcap

The Fear and Greed Index measures volatility, market momentum/ volume, social media, surveys, dominance, and Google search trends to gauge market sentiment.

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Bitcoin Relative Strength Index (RSI)

41.9

Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price, while 30 or below indicates an oversold or undervalued condition.

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Post Script…

Cautionary Notes

It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. The Digital Commonwealth always advises you to obtain your own independent financial advice before investing or trading in cryptocurrency.

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