Bitcoin Options Market Growing Bearish Sentiment as Trump's Sentencing Date Triggers Market Panic

As expected, bearish headwinds from the uncertainty Trump's sentencing has triggered negative reactions across the crypto markets.

The uncertainty surrounding Trump’s sentencing has sent bearish headwinds throughout the crypto markets In fact, the impact seems to have nullified the bullish tailwinds from the widely-anticipated Fed rate cut expected to be announced during the FOMC meeting on Sept 17.

Indicatively, the red shaded area in the BTC price chart above shows how BTC price fell 14.4% over the last 10-days, with Trump’s legal squabbles compounding bearish pressure.

Less than 24 hours after US Judge Merchan announced Trump’s sentencing on Tuesday, BTC price tumbled to a 20-day low of $55,633 by mid-day Sept 3.

Bitcoin Options Market Growing Bearish Sentiment

Bitcoin price has now rebounded towards the $56,740 area at the time of writing on Sept 5. However, critical derivatives markets data shows bull traders are increasing placing cautious bets, hedging against a potential Bitcoin crash if ongoing legal squabbles impair Trump’s campaign hopes.

More so, the US SEC issued a wells notice to AI chips giant, NVIDIA, leading to a wider $300 billion sell-off that saw equities lose $1 trillion in market capitalization within a 24-hours.

The impending release of the U.S. jobs report on Friday also has traders on edge, as the figures will be pivotal to the next Fed Rate decision slated form Sept 17.

In addition, September has been a challenging month for Bitcoin, with an average decline of more than 8% over the past five years.

These bearish catalysts, and heightened economic uncertainty have triggered a spike in demand of Bitcoin options, reflecting growing anxiety among long-term investors.

A surge in demand for these hedges, particularly in reaction to the upcoming jobs data and the November presidential election.

One notable trend is the growing interest in options contracts expiring on November 29 at a strike price of $35,000, which suggests that some investors are hedging against the possibility of pro-crypto presidential candidate Donald Trump losing the race for the White House.

– Sean McNulty, director of trading at liquidity provider Arbelos Markets.

Bitcoin options are derivative contracts that give traders the right, but not the obligation, to buy or sell Bitcoin at a specified price before a predetermined expiration date.

These contracts are often used to hedge against price volatility or to speculate on future movements of BTC.

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