This week, the United States will hold a new FOMC meeting in the early hours of Thursday. Prior to that, on Wednesday night, the highly anticipated CPI inflation data will be released, causing global markets to be on edge. According to reports from “SignalPlus,” the “megaphone of the Federal Reserve” Nick Timiraos stated that most market economists and other professional Fed observers now expect the Fed to cut interest rates once or twice in September or December. There are currently two risks: one is that the Fed may interpret robust economic activity as insufficiently tight policy, signaling that high interest rates may not be maintained for long enough; the other risk is that the Fed’s preemptive strike may ignite the markets.
In fact, the upcoming inflation data and the outlook for Fed interest rates are crucial for BTC. Recent strong economic data in the United States and the increasing negative correlation between Bitcoin and US bond yields have led investors to be cautious of potential increased volatility before major economic data releases. In the past 24 hours, BTC briefly rose to the $70,000 mark before quickly falling to a one-week low. This market trend is indeed concerning, as even though BTC spot ETFs saw a significant inflow of funds in the previous week, they are not providing enough confidence support for investors in the current “critical 36 hours.” Anand Gomes of Paradigm commented that the crypto market is like an addict, constantly needing positive news to support it, as “No news is bad news in crypto.”
In terms of options, the front-end IV saw a significant increase in the United States due to economic data uncertainty and the decline in Bitcoin prices from selling pressure. There was a large amount of put option buying in various expirations for ETH in June, and the proportion of front-end put option buying for BTC also increased. However, at the same time, there was a significant amount of selling of call options with a strike price of $70,000 expiring in late June for both coins, causing a sharp simultaneous decline in the front-end Vol Skew for the two currencies.
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