Key Points
- Expectations for pro-crypto policies, including the Bitcoin Strategic Reserve (SBR), are high as Donald Trump’s presidential inauguration approaches.
- Bitwise Europe’s head of research, Andre Dragosch, states that the SBR isn’t fully priced in, as Polymarket odds rise above 50%.
The anticipation is mounting as the day of Donald Trump’s presidential inauguration arrives, with the market eagerly awaiting potential pro-crypto policies, including the Bitcoin Strategic Reserve (SBR).
Andre Dragosch, who leads research at Bitwise Europe, has stated that the SBR isn’t fully priced in, as the odds on Polymarket fell below 40%.
Market Reactions and Expectations
At the time of Dragosch’s post, the market wasn’t even pricing in a 50/50 chance of a crypto executive order from President Trump on his first day. However, the market quickly adjusted a few hours later. Currently, the odds of the SBR on Polymarket have risen above 50%.
This sharp market reaction also caused Bitcoin’s price to surge from $102K to a new high of $109.5K just hours before the inauguration. This suggests a potentially bullish outcome for the market during the event, but it remains uncertain whether the SBR will be included in the first-day executive orders.
Options Market Predictions
In the Options market, traders are expecting significant movements in the next 48 hours. The level where options are relatively worthless, known as max pain, is at $102K and $103K for the January 20 and 21 expiries. Both these expiries have the highest Open Interest (OI) for put options (bearish bets) at $96K and $97K, respectively.
However, call options (bullish bets) are dominating with $85M on notional value for the 21st January expiry. This suggests traders are expecting price swings between $96K/$97K and $112K. Additionally, with a put/call ratio below 1 (at 0.58), there is a premium for calls than puts, indicating a strong bullish sentiment in the Options market.
The 25-Delta Risk Reversal (25RR) indicator supports this sentiment with a positive reading at 12.9 volatility for the past 24 hours. This suggests a significant price swing on Tuesday as the market digests potential policy announcements and their possible impact.
The daily price chart implies a similar scenario. At the time of writing, Bitcoin’s upswing is on the verge of clearing the overhead bearish order block and supply zone, red, at $105K-108K. This could push Bitcoin above its trendline support in the November rally and into price discovery.
In such a scenario, $112K, $116K, and $120K could be within reach if the bullish momentum extends post-inauguration. Conversely, the mid-range and moving average at $96K, alongside the breakout level above $100K, could provide key support for potential drops.
