PANews reported on December 11th that, according to options data analyst [email protected], the recently concluded Federal Reserve meeting announced a 25 basis point interest rate cut and the resumption of purchasing $40 billion in short-term U.S. Treasury bonds, releasing a clear dovish signal to replenish liquidity in the financial system, which is beneficial to the market. However, it is still too early to talk about restarting quantitative easing (QE) and a bull market. The crypto market has poor liquidity and low market activity as Christmas and the year-end settlement approach, limiting the bull market's momentum. Data shows that by the end of December, the cryptocurrency options market had accumulated over 50% of its options positions. The biggest resistance level for Bitcoin was the $100,000 mark, while for Ethereum it was $3,200. Implied volatility (IV) across major maturities trended downwards this month, indicating a gradual weakening of market expectations for volatility. Furthermore, the Skew indicator remained negatively skewed, with put prices significantly higher than call prices with the same Delta, reflecting a stable market and the dominance of covered call strategies. More traders were also using put options to hedge against market downturns. Overall, the crypto market is currently experiencing low sentiment and poor liquidity. The prevailing view in the options market is that it will decline slowly, but we should be wary of a potential market reversal caused by a sudden positive development, although this possibility is low.PANews reported on December 11th that, according to options data analyst [email protected], the recently concluded Federal Reserve meeting announced a 25 basis point interest rate cut and the resumption of purchasing $40 billion in short-term U.S. Treasury bonds, releasing a clear dovish signal to replenish liquidity in the financial system, which is beneficial to the market. However, it is still too early to talk about restarting quantitative easing (QE) and a bull market. The crypto market has poor liquidity and low market activity as Christmas and the year-end settlement approach, limiting the bull market's momentum. Data shows that by the end of December, the cryptocurrency options market had accumulated over 50% of its options positions. The biggest resistance level for Bitcoin was the $100,000 mark, while for Ethereum it was $3,200. Implied volatility (IV) across major maturities trended downwards this month, indicating a gradual weakening of market expectations for volatility. Furthermore, the Skew indicator remained negatively skewed, with put prices significantly higher than call prices with the same Delta, reflecting a stable market and the dominance of covered call strategies. More traders were also using put options to hedge against market downturns. Overall, the crypto market is currently experiencing low sentiment and poor liquidity. The prevailing view in the options market is that it will decline slowly, but we should be wary of a potential market reversal caused by a sudden positive development, although this possibility is low.
Analysis: The Fed's rate cuts and purchases of short-term Treasury bonds are beneficial to the crypto market, but liquidity remains weak at the end of the year.
PANews reported on December 11th that, according to options data analyst [email protected], the recently concluded Federal Reserve meeting announced a 25 basis point interest rate cut and the resumption of purchasing $40 billion in short-term U.S. Treasury bonds, releasing a clear dovish signal to replenish liquidity in the financial system, which is beneficial to the market. However, it is still too early to talk about restarting quantitative easing (QE) and a bull market. The crypto market has poor liquidity and low market activity as Christmas and the year-end settlement approach, limiting the bull market's momentum.
Data shows that by the end of December, the cryptocurrency options market had accumulated over 50% of its options positions. The biggest resistance level for Bitcoin was the $100,000 mark, while for Ethereum it was $3,200. Implied volatility (IV) across major maturities trended downwards this month, indicating a gradual weakening of market expectations for volatility. Furthermore, the Skew indicator remained negatively skewed, with put prices significantly higher than call prices with the same Delta, reflecting a stable market and the dominance of covered call strategies. More traders were also using put options to hedge against market downturns.
Overall, the crypto market is currently experiencing low sentiment and poor liquidity. The prevailing view in the options market is that it will decline slowly, but we should be wary of a potential market reversal caused by a sudden positive development, although this possibility is low.
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