SignalPlus Volatility Column: BTC Encounters Significant Correction at Historical Highs
In terms of digital currency, Bitcoin plummeted more than 10% after breaking its historical high, briefly dipping below $60,000. It has now recovered most of its losses and returned to around $66,000. As of now, the amount of liquidated long/short positions for BTC during the day has reached 218 million/96.78 million.
Yesterday (5 MAR), the final reading of the US February S&P Global Services PMI was recorded at 52.3, higher than the expected 51.4 and the previous value of 51.3, indicating slight signs of rising price pressures. The subsequently released February ISM Services PMI index fell short of expectations, causing US Treasury yields to open high and then decline, with the current two-year/ten-year yields at 4.566% / 4.166%. All three major US stock indices closed down more than 1%.
Source: SignalPlus, Economic Calendar
Source: Binance & TradingView
In the cryptocurrency sector, Bitcoin plummeted over 10% after breaking through its historical high, dipping below $60,000 at one point, but has since recovered most of its losses, returning to around $66,000. As of now, the amount of liquidated long/short positions for BTC during the day has reached 218 million / 96.78 million. Regarding this pullback, analysts pointed out that Bitcoin had been rising almost vertically over the past few days, and a bit of profit-taking behavior was expected. Additionally, some traders held a "one-time profit-taking" mentality, which led to quick profit-taking selling pressure at the historical high, giving reason to believe that this was not a so-called "panic sell-off." However, the market has still raised its expectations for short-term price volatility, with implied volatility for options at the front end rising sharply by 3 to 5%. ETH surged by 10% Vol, further widening the gap with BTC. In terms of trading, this round of pullback attracted the establishment of bearish options, represented by BTC 8 MAR-62000-P and ETH 29 MAR 3500/3400-P buy orders. On the other hand, during the price rebound, the purchase of bullish strategies on large platforms remained active, expressing optimism about future upward potential.
Source: Deribit (as of 6 MAR 16:00 UTC+8)
Source: SignalPlus, short-term implied volatility levels rise again
Data Source: Deribit, BTC transaction distribution
Data Source: Deribit, ETH transaction distribution
Source: Deribit Block Trade
Source: Deribit Block Trade
