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Bitcoin's Jackson Hole Test: How Hard Could Powell's Address Hit BTC Prices?

Bitcoin's Jackson Hole Test: How Hard Could Powell's Address Hit BTC Prices?

CryptoNewsNetCryptoNewsNet2025/08/22 09:35
By:coindesk.com

As Federal Reserve Chairman Jerome Powell’s speech at Jackson Hole approaches, the key question on everyone’s mind is: how volatile could bitcoin BTC$113,191.61 become?
The answer points to slightly above average volatility, not the extreme swings that the widespread attention on the event might suggest.
"BTC options are pricing in about a ±2.0% move around Powell’s Jackson Hole speech," Pulkit Goyal, head of trading at crypto market maker Orbit Markets, told CoinDesk. Orbit specializes in crypto options and structured derivatives.
The anticipated 2% price swing around Powell’s speech suggests slightly higher volatility than the average daily volatility of 1.52%, which is derived from the 30-day realized volatility of 29%.
Traders use the pricing of options with different strike prices and maturities and implied volatility and option greeks to gauge an expected range of price movement.
Implied volatilty refers to the market's expectation on how much the underlying asset is expected to move over a specific time frame.
Volmex's one-day implied volatility index (BVIV1D) has increased to an annualized 49% as of writing, the highest since May 26, according to data source TradingView.
That equates to a 24-hour price swing of 2.5%.Note that volatility is direction-agnostic, meaning price swings hinted by options and implied volatility indices can unfold in either direction.
That said, downside volatility looks more likely in case Powell sounds balanced, contrasting widespread expectations for rate cut hints.
Some traders have been picking up put options preparing for such an outcome.
"If his tone leans more balanced than dovish, markets could see a retracement, which has driven demand for downside protection. The skew tells the story: overnight 25-delta risk reversals are currently 6 vols put over call," Goyal told CoinDeskPowell is scheduled to speak Friday morning at the Fed’s annual Jackson Hole Economic Policy Symposium.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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