Crypto Market Resurgence Linked to ‘Trump Trade’ and Political Events: Bybit
The cryptocurrency market’s recent resurgence is linked to a recent series of political events, including an assassination attempt on former President Donald Trump.
According to the Bybit Crypto Derivatives Report, the incident, which occurred on July 13, 2024, has spurred a notable recovery in crypto spot and derivatives markets, a trend referred to as the “Trump Trade.”
The report highlighted that futures yields have rebounded to pre-sell-off levels, demonstrating a healthy demand for leverage through derivatives contracts.
The recovery is evident in both Bitcoin and Ethereum markets, with open interest levels stabilizing to pre-sell-off conditions.
Notably, ETH futures have shown a strong rally in yields at short tenors, flattening the term structure ahead of the anticipated start-of-trading announcement for its Spot ETFs.
In the perpetuals market, there has been a return to moderately positive funding rates in most markets, except for Toncoin.
The funding rates indicate a healthy demand for long positions, signaling a recovery in market sentiment following the sell-off in early July.
The report added that the options market has also reflected this resurgence, with a rally in short-tenor volatility following the spot price movements.
This has led to a temporary compression and subsequent steepening of the volatility term structure.
Despite short-term price volatility, long-term volatility expectations remain unchanged.
There has been a notable increase in demand for out-of-the-money (OTM) calls, indicating bullish sentiment and a desire for upside exposure.
Meanwhile, implied volatility has increased above realized volatility levels, driven by recent spot price movements.
This trend indicates a higher market expectation for
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