Matrixport Research Institute’s latest study reveals the following recent focus areas:
1. The realized volatility of BTC is approaching its lowest point in years, making options trading more likely.
2. There is a high probability of the SEC approving the S-1 application.
3. The spot position of ETH has seen a significant increase.
4. Bullish sentiment is emerging in BTC options trading, with an increasing expectation of market growth by 2025.
The market has entered a phase of consolidation during the summer, where decreased volatility allows investors to purchase options at lower costs without taking on excessive market risks. The demand for fiat-to-crypto conversions has weakened, signaling a potential period of calm, with relatively low fear of missing out (FOMO) sentiment. Therefore, it is advised for investors to adopt a rational positioning strategy.
The realized volatility of BTC is approaching its lowest point in years. A year ago, when volatility reached similar levels, Matrix on Target advised investors to utilize options to express their views while investing most of their crypto assets in stablecoin-type assets tied to government bonds for stable returns.
The SEC has officially approved 19 b-4 applications submitted by eight asset management companies for listing and trading Ethereum ETFs on US exchanges, although the S-1 registration statement is yet to be completed. As a result, the open interest in Ethereum futures has surged from $7.5 billion to $13 billion, with funding rates rising to 27% on an annual basis.
Although the optimal market period often occurs before the product is approved by the SEC, it is common to observe selling behavior after the product is listed, as seen with the Bitcoin futures listing in December 2017, Coinbase IPO in April 2021, Bitcoin ETF based on futures in October 2021, and Bitcoin spot ETF in January 2024.
However, the market believes that the SEC will soon approve the S-1 application, and the ETH ETF will be listed between July and September this year. Once the summer consolidation period ends, the market will experience another bullish trend. Cautious investors can protect their portfolios through options in a low volatility environment or purchase call options to strategically benefit from the rise in mainstream cryptocurrencies while utilizing the risk exposure to obtain “risk-free” returns.
Bullish sentiment is evident in Bitcoin options trading, deviating from the price trend of BTC. BTC has dropped over 1% in the past 24 hours to $64,500 (data as of 2 PM on the 21st). However, QCP Capital indicates that there has been significant buying of options with December and March expirations and strike prices ranging from $90,000 to $100,000 in the past 24 hours, suggesting that the market is bottoming out and preparing for a potential rebound that may last until 2025. The bullish sentiment in the options market contradicts the Bitcoin price trend, especially in the long-term market, indicating investors’ expectations of future price increases.
The above viewpoints are from Matrix on Target. Contact us to obtain the complete report from Matrix on Target.
Disclaimer: The market carries risks, and investment should be exercised with caution. This article does not constitute investment advice. Digital asset trading can involve considerable risks and volatility. Investment decisions should be made after careful consideration of individual circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.