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Here’s how Bitcoin (BTC) traders can profit whether its price move up or down 10% within 55 days.

Bitcoin options: Bracing for volatility

Traditional market analysts have started calling for a volatility spike due to the United States government debt discussion.

Moreover, signs of stress coming from the banking sector surprised investors after the U.S. Dollar Index (DXY), which measures the U.S. dollar against a basket of foreign currencies, reached its lowest level in 12 months at 101 on May 4.

Stock market and macro analyst Markets & Mayhem posted a chart from Deutsche Bank that correlates historical government spending and debt concerns with spikes in the stock market volatility.

U.S. Treasury Secretary Janet Yellen has warned that the government may run out of cash by June if Congress fails to raise the debt ceiling. According to the BBC, President Joe Biden has called a meeting of congressional leaders on the issue for May 9.

Bitcoin (BTC) starts a new week at the center of new crypto industry drama as the highest fees in two years pressure price action.

Downside volatility is greeting traders thanks to a full mempool, and explanations point the finger at multiple parties.

The largest exchange, Binance, is adding to the confusion, pausing BTC withdrawals several times over what it calls network “congestion.”

Amid the turmoil, BTC/USD is showing signs of strain, breaking down from $28,000 to threaten an exit of its broader trading range.

The events mark a flustered start to a week full of potential BTC price volatility catalysts. These come in the form of macroeconomic data releases, including the Consumer Price Index and Q1 earnings reports.

The price of new memecoin Pepe (PEPE) has plunged more than 42% only days after reaching its all-time high on May 6, leaving at least one investor with hundreds of thousands in paper losses. 

According to blockchain analytics service Lookonchain, one crypto “whale” purchased 962.3 billion Pepe tokens using 70 Wrapped Bitcoin (WBTC) and 470 Ether (ETH) for an average price of $0.000003122 on May 5.

PEPE has, however, fallen 42% from its all-time high since then, according to CoinGecko. The crypto investor’s PEPE holdings are now estimated to be worth only $2.4 million, marking an unrealized loss of more than $600,000.

Despite the recent price decline, Pepe still holds a market capitalization of just over $1 billion, making it the 45th largest cryptocurrency by overall valuation.

Since its inception on April 14, Pepe has attracted widespread attention, witnessing over $636 million in trading volume within the last 24 hours, and single-handed burning more than 5,000 ETH in related gas fees via Uniswap trading as of May 5.

As so-called “memecoins” capture the attention of the wider crypto industry in recent weeks, a viral video has emerged detailing just how easy it is for anyone with an internet connection to create a brand new cryptocurrency from scratch. 

A May 6 video from digital artist Johnny Shankman — who goes by @whitelights.eth on Twitter — shows him completing a “speedrun” of creating and deploying an entirely new token, humorously dubbed “EASY_MONEY” in just 27 seconds. The record was then beaten just a day later, clocking in at 22.45 seconds. 

The term "speed run" originates from the gaming community and is typically used in reference to completing a game, or level in a game, as quickly as possible. 

In the now-viral video, Shankman shows how any user can quickly create a new token by utilizing a program called Contracts Wizard, created by the crypto cybersecurity firm OpenZeppelin. The Contacts Wizard tool generates code for an ERC-20 token with a few quick clicks of a cursor. On the program, users can select a number of potential features for their token.

After the code has been created, Shankman then uses an application called Remix, which compiles the token’s smart contract and deploys it on a given blockchain network. In the video, Shankman opts for deploying his EASY_MONEY (EZ) token on the Ethereum testnet.

On May 6, Ethereum Foundation transferred nearly $30 million in Ether (ETH) to the Kraken cryptocurrency exchange, causing jitters in the market about a potential selloff event.

ETH price fell 4.8% to $1,900 on the day, but the decline has been negligible so far amid a wider recovery trend.

ETH price holding key support

Ether's price recovered modestly to $1,920 on May 7 after testing its 50-day exponential moving average (50-day EMA; the red wave) near $1,850 as support a day ago.

Moreover, the price volatility dropped on Kraken in the said period, per the contracting Bollinger Bands Width in the chart below. That further shows traders' calm amid the Ethereum Foundation transfer.

Notably, the 50-day EMA has capped Ether's downside attempts so far in 2023, barring the early March selloff that saw the price briefly falling below the red wave. Meanwhile, testing it as support has prompted the ETH price to pursue a breakout above $2,000.