SignalPlus Volatility Column (20230711): Continued Bullish Outlook on Bulk Trades in the Third Quarter

The New York Fed's consumer expectations survey shows that consumer expectations for inflation in the next year have declined for three consecutive months, from 4.07% last month to 3.83%, reaching the lowest level since April 2021. The price of used cars in the United States fell by 4.2% in June, also marking the largest monthly decline since the early days of the pandemic. These data all help to lower expectations for Wednesday's CPI data in the market. Nevertheless, hawks and doves within the Federal Reserve maintain their previous positions: Cleveland Fed President Mester revealed that she was leaning towards raising rates in June, while San Francisco Fed President Daly also believes that the Fed may need to raise rates several more times to bring inflation back to target levels. However, Atlanta Fed President Bostic believes that interest rates do not need to rise further and that current policy is "clearly" in a restrictive range, allowing the Fed to express patience.

Turning to cryptocurrencies, the BTC market is still in a state of speculation above $30,000. After a long period of quiet during Asian trading hours, there was a significant volatility in the market after the US stock market opened yesterday. Following the bullish stance of traditional finance giants such as Standard Chartered, investors flocked in and brought about a sharp rise, pushing BTC back above the $31,000 mark. This happened because Standard Chartered raised its valuation estimates for Bitcoin at the end of 2023/2024 to a stunning $50,000/$120,000 respectively in its analysis report released on Monday. However, after the market calmed down, it gave back almost all of the gains and the price returned to the starting point. Looking at the liquidation data from Coinglass, despite no change in price, this round of speculative trading wiped out the positions of highly leveraged users.

The implied volatility has slightly declined today, retracing the gains from yesterday's rebound. The volatility in mid-to-long term for BTC/ETH has decreased by about 1%/2% respectively. In the short term, the focus is on the 13JUL23, with inflation data supporting a high position. The market trading volume has increased compared to yesterday, with majority of the bulk trades consisting of bullish strategies. Traders have purchased a large number of call options on BTC options expiring at the end of September, and have also built bullish Risk Reversal positions at the end of July. As for ETH, most trades are for September and beyond, such as a 29MAR24 2000 vs 3000 call spread for 14,503 ETH, as well as a bullish ratio call spread strategy buying September and selling December options at a 2000 strike.

Source: Coinglass

Source: Deribit (as of 16:00)

Source: SignalPlus

Source: Laevitas

Source: Laevitas

Source: Deribit Block Trade

Source: Deribit Block Trade

You can search for SignalPlus in the Plugin Store of ChatGPT 4.0 to get real-time cryptocurrency information. If you want to receive our updates instantly, please follow our Twitter account @SignalPlus_Web 3 or join our WeChat group (add assistant's WeChat: chillywzq), Telegram group, and Discord community to interact and communicate with more friends.

SignalPlus Official Website: https://www.signalplus.com/