SignalPlus Macro Research Report (20231218): Near the end of the year, the encryption market has stagnated

In the past two days, many people have begun to take vacations for the Double Festival, and the exchange has run out of large orders. I think the largest purchase recently was less than 250,000 US dollars, and I bought a 37,000 bearish position at the end of March.

The volatility smile curve of BTC due at the end of the year! Bosses, do you need to be so pessimistic? The put option on the left has much higher volatility than the put on the right! There is huge buyer demand for put options.

Markets appear to have entered the final chapter of the year, with traders tapering off trading volumes and cross-asset volatility beginning to decline, with the Bank of Japan emerging as the only remaining event risk for the year and weak U.S. manufacturing data (New York, December The Fed Manufacturing Index -23.6 points to -14.5 points) further supports the argument for the Feds pivot, with the markets FOMO sentiment growing as the Fed throws caution to the wind with core inflation remaining well above its long-term target, even as the The most determined short sellers can’t help but wonder whether this is the beginning of the next wave of asset inflation.

Last week, SPX options open interest hit a record high, surpassing pre-pandemic highs, as traders piled into bullish trades following the Feds dovish statement, and the Russell 2000 index went from 0.5% to 1.5% in just 1.5 months. The dramatic move from 52-week low to 52-week high once again proves that the traditional labels of bull market or bear market are meaningless.

Looking back at history, the path before the first rate cut was generally positive for the stock market. The price trend after the rate cut depends on whether the economy actually enters recession. The current cycle seems to be in the middle of a typical easing cycle, and subsequent trends will depend on the current hard data. Will the slowdown turn into a full-blown recession?

On the cryptocurrency side, prices continue to stagnate, and optimism regarding ETFs may have been fully priced in, with GBTCs NAV discount having narrowed rapidly; while ETF approval will certainly have a positive impact on market sentiment, it is important to note that , a large part of the initial capital flow is likely to come from outflows from GBTC and listed mining companies. However, as investors begin to return to the cash is garbage view, the sharp decline in global bond yields may offset some of these effects, but this also will leave us once again at the mercy of the movement in bond yields.

In addition, sell-side analysts predict that the current trend is largely driven by the speculative mentality of retail investors against the re-engagement of institutions. When the news is actually announced, there may be a sell-off instead, considering the current overbought status of BTC. , maybe ETH/BTC spread trading might be a good strategy? Only time will tell...

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