SignalPlus Volatility Column (20240327): The market enters a brief consolidation phase, with mid to front-end volatility experiencing a downward adjustment

2024-03-28 10:25:51

Collection

The upward trend of digital currencies has paused after a slight retreat from recent highs. BTC and ETH have fluctuated slightly around $70,000 and $3,600 respectively for most of the past 24 hours, and the upward potential has become less clear.

Yesterday (26 MAR), U.S. durable goods orders saw their first increase in nearly three months, with housing prices accelerating, as the Housing Price Index rose by 6.6% year-on-year, higher than the previous value of 6.3%. The U.S. bond market remained calm, while the stock market initially showed a similar overall performance before experiencing a large-scale futures sell-off in the last trading hours, ultimately closing slightly lower.

Source: SignalPlus, Economic Calendar

Source: SignalPlus \& TradingView

Cryptocurrencies paused their upward trend after a slight pullback from recent highs. BTC and ETH oscillated slightly around $70,000 and $3,600 respectively for most of the past 24 hours, with upward potential becoming less clear. This led the options market to lower the implied volatility and Vol Skew in the mid to front end. Trading strategies reflecting bearish volatility and weak upward momentum can be seen, such as BTC Short 31 MAY 24-85000-C, BTC Short 5 APR-68000/73000-Strangle, and ETH Short 26 APR 24-42000-Straddle. Additionally, most of the medium-term trades for both cryptocurrencies still primarily adopt a defensive bearish spread strategy. Some BTC trades have shifted to the mid to long term, with the 27 DEC 24 100000-C seeing a large purchase of 725 BTC, marking the largest opening position yesterday.