A report from Bybit and Block Scholes shows crypto traders favoring leveraged long positions after Trump’s election win, signaling confidence in market stability.
Trump Effects on Crypto Traders
Market trends in the immediate aftermath of the U.S. elections, as indicated by a recent report by Bybit and Block Scholes, indicate that traders are strongly inclined to pursue leveraged long positions, particularly in futures and perpetuals.
The report also states that traders’ preference indicates that they believe the short-term market volatility has decreased, which suggests a more stable environment.
Additionally, the period has been distinguished by robust trading volumes and a resurgence in interest in “directional bets.” Users’ propensity to capitalize on sustained market activity and positive post-election movement is indicated by the change in these metrics.
The USD value of bitcoin (BTC) experienced a significant increase in the hours leading up to the confirmation of Donald Trump’s victory, as evidenced by market data.
This increase is indicative of the crypto community’s enthusiasm for the possibility of having two pro-crypto individuals in the highest office of the United States. As Bitcoin.com News reported, the top crypto asset briefly exceeded $77,000. Some market observers now predict that this rally will persist in the near future.
According to the Bybit and Block Scholes report, leveraged positions that had been unwound during pre-election spot volatility have since rebounded, as the market has responded to Trump’s ascension to the Oval Office. This resulted in an increase in open interest for both perpetuals and futures. The report included the following:
The report implies that BTC continues to dominate futures and derivatives markets, suggesting that a substantial rotation of capital into ether (ETH) contracts has not yet taken place.
Lower Short-Term Volatility for ETH
In the interim, the report posits that the volatility term structure of BTC was flattened as a result of Trump’s victory, which has not been contested. The short-term volatility of the crypto asset decreased to align with its longer-term levels as a result of Trump’s victory, which was the market’s preferred outcome.
The report also emphasized the recent increase in BTC options open interest, which occurred in the context of reduced trading volumes. This surge is a sign of investors’ heightened interest in potential post-election volatility.
Although the volatility term structure of ETH has also flattened, the report reported that its short-term volatility is lower than its long-term volatility, resulting in a steeper term structure. This implies that the anticipated short-term volatility for ETH is reduced.
Despite the current market calm, open interest has increased, suggesting potential future volatility, despite the low trading volumes, the report concluded.
