Market turmoil and institutional behavior during election week | Weekly market insights review

On the evening of November 5th at 8 pm, during the live stream on the official Matrixport YouTube channel, Matrixport's Head of Asset Management, Daniel, analyzed the market volatility of the past week (October 30th - November 4th). BTC prices experienced severe fluctuations during the election cycle, influenced by the uncertainty of the US election and the rising global market risk-averse sentiment. Daniel analyzed the driving factors behind BTC's volatility, the changes in the hedging demand in the options market, and the continued inflow of institutional capital supporting the market. He also pointed out the potential opportunities and strategies for investors in this volatile market. Live stream content: Recently, BTC prices have seen significant volatility driven by macroeconomic uncertainties such as the election. BTC once reached a high of $73,000 but then quickly retreated due to market expectations adjustments. The bulls and bears are engaged in an intense battle, with the options market seeing increased hedging demand, indicating investors' high sensitivity to short-term volatility. Overall, the BTC market share continues to steadily increase, demonstrating its relative strength in the highly volatile market. Analysis of market volatility reasons: The impact of the election on the BTC market: During the US presidential election, the market's focus on the election results has led to increased volatility in the global capital markets, with the cryptocurrency market being particularly volatile. As a hedge asset, BTC typically exhibits higher sensitivity during major events. The uncertainty surrounding the election results has led traders to expect significant fluctuations in BTC prices, adding to the short-term volatility risk in the market. Strengthening of market risk-averse sentiment: On the eve of the election, data from the CME (Chicago Mercantile Exchange) BTC options showed a significant increase in the market's hedging demand against BTC price declines. The market's aversion to short-term risks indicates concerns about potential BTC pullbacks, with the expected volatility in the options market further rising. The market sentiment reminds investors to proactively manage risks to prevent short-term shocks from the election results. The options market and institutional behavior in the current context: Hedging signals in the CME options market: As the election week approached, the demand for CME BTC options increased, with traders actively adding hedging positions to protect against price volatility triggered by the election results. The volatility in this market indicates traders' concerns about the short-term downside risks of BTC. Institutional investors' focus on BTC: Recently, several institutions, including a UK pension fund, have announced the inclusion of BTC in their asset portfolios, marking the rising status of BTC in the traditional financial realm. The inflow of institutional capital not only strengthens the long-term support for the BTC market but also reduces the short-term volatility caused by retail investors. VanEck's model predicts that BTC may be included in central bank reserve assets in the future, further solidifying its position as a hedge asset. Investment directions to watch: Long-term BTC holding strategy: BTC is seen as "digital gold," and in an uncertain macroeconomic environment, its anti-inflation and hedging properties make it an ideal store of value asset. Long-term BTC holding can help investors achieve stable appreciation when facing market volatility, especially by staying on the sidelines during the election cycle to control risks. For investors seeking to preserve value in the cryptocurrency market, long-term BTC holding provides an excellent return guarantee. Risk aversion and market observation strategy: Due to the short-term uncertainties brought by the election, investors can choose to stay on the sidelines to reduce their exposure to market volatility risks. After the market environment becomes clearer, they can re-enter the market, which helps to avoid short-term volatility risks and provides investors with stable long-term returns. This strategy is suitable for investors who wish to preserve value in the long term, as it avoids short-term risks during periods of volatility. Conclusion: Against the backdrop of increasing market volatility, the uncertainty of the US election has significantly increased the demand for hedging, and BTC, with its hedging properties, has received widespread attention. Meanwhile, the CME options market shows strong hedging demand, reflecting the market's cautious attitude towards short-term volatility. The continued entry of institutional investors has further strengthened BTC's market position and long-term support.