Bitcoin's Volatility Shifts to Put Options Amidst Trade Tensions

Bitcoin's volatility has shifted towards put options, indicating a lack of catalysts for an upward move, according to QCP's daily market observation. This shift comes amidst ongoing trade tensions and President Trump's sensitivity to market reactions.

The recent announcement of a 25% tariff on steel and aluminum imports by the Trump administration briefly disrupted the market. This move, coupled with Trump's remarks about possible sanctions on Japan, has cast doubt on the temporary reprieve in trade tensions seen last week. Asian stock markets declined, and Bitcoin briefly dropped to $95,000 before rebounding, suggesting an emotion-driven market swing rather than a fundamental shift in risk appetite.

Bitcoin's volatility is now biased towards put options until April, reflecting a lack of catalysts for an upward move. A feedback loop is emerging, with President Trump highly sensitive to market reactions, and his stance facing increasing market scrutiny. This may further embolden him, increasing market volatility.

The market is now awaiting Powell's testimony and Consumer Price Index (CPI) data release, which could provide further insights into the market's direction. As Mexico and Canada are among the top three suppliers to the US, the tariffs cast doubt on last week's temporary reprieve, potentially reigniting trade tensions. The uncertainty surrounding Trump's remarks about possible sanctions on Japan adds to the market's volatility.

Commodity prices remained relatively stable, while Asian stock markets declined, and Bitcoin briefly dropped to $95,000 before rebounding. This indicates that the market is driven by emotions rather than fundamental shifts in risk appetite. The lack of catalysts for an upward move in Bitcoin's price has led to a bias towards put options until April.

The market is now focused on Powell's testimony and CPI data release, which could provide further insights into the market's direction. The uncertainty surrounding trade tensions and Trump's remarks about possible sanctions on Japan adds to the market's volatility. As the market awaits these developments, investors are closely monitoring the situation, with Bitcoin's volatility biased towards put options until April.