Bitcoin's Jackson Hole Test: How Hard Could Powell's Address Hit BTC Prices?

As Federal Reserve Chairman Jerome Powell’s code astatine Jackson Hole approaches, the cardinal question connected everyone’s caput is: however volatile could bitcoin (BTC) become?

The reply points to mean volatility, not the utmost swings that the wide attraction connected the lawsuit mightiness suggest.

"BTC options are pricing successful astir a ±2.0% determination astir Powell’s Jackson Hole speech," Pulkit Goyal, caput of trading astatine crypto marketplace shaper Orbit Markets, told CoinDesk. Orbit specializes successful crypto options and structured derivatives.

Traders usage the pricing of options with antithetic onslaught prices and maturities and implied volatility and enactment greeks to gauge an expected scope of terms movement.
Implied volatilty refers to the market's anticipation connected however overmuch the underlying plus is expected to determination implicit a circumstantial clip frame.

Volmex's one-day implied volatility scale (BVIV1D) has accrued to an annualized 49% arsenic of writing, the highest since May 26, according to information root TradingView.
That equates to a 24-hour terms plaything of 2.5%. That's somewhat higher than the mean regular determination of 1.18% implicit the past 30 days.

Note that volatility is direction-agnostic, meaning terms swings hinted by options and implied volatility indices tin unfold successful either direction.

That said, downside volatility looks much apt successful lawsuit Powell sounds balanced, contrasting wide expectations for complaint chopped hints. Some traders person been picking up enactment options preparing for specified an outcome.

"If his code leans much balanced than dovish, markets could spot a retracement, which has driven request for downside protection. The skew tells the story: overnight 25-delta hazard reversals are presently 6 vols enactment implicit call," Goyal told CoinDesk.

Powell is scheduled to talk Friday greeting astatine the Fed’s yearly Jackson Hole Economic Policy Symposium.