SignalPlus Volatility Column (20240702): Can July Bounce Back?

The past month has indeed been a heavy loss for Bitcoin investors, with the price continuously declining from the high point of nearly 72,000 at the beginning of last month, and at one point falling below the 60,000 mark. As July begins, ETF funds have gradually returned to positive inflows, and the BTC price has also moved upwards, breaking free from the 60,000-62,000 fluctuation range at the end of last month, challenging 63,200 USD twice. This will be crucial in witnessing whether BTC can continue to recover lost ground, and investors have high hopes for this. However, if the challenge fails, BTC is likely to repeat the disaster of June and fall below 61,000 again. Meanwhile, on Tuesday, Federal Reserve Chairman Powell will deliver a speech, after which many influential U.S. macro data will be released to the market, such as Wednesday's ADP, service PMI indicators, and Friday's non-farm payrolls and hourly wages, all of which will be closely monitored by the market.

Source: SignalPlus, Economic Calendar

Source: Farside Investors; Trading View

In terms of options, implied volatility continues to decline, with BTC constantly breaking recent historical lows. ETH IV has experienced several significant fluctuations due to the impact of ETF news, but the overall trend is still downward, currently around 50+%, generally 15% Vol higher than BTC for the same term. Speaking of Ethereum ETF, the U.S. SEC has returned the S-1 forms to the issuers, and the market expects approval to come within two weeks. Additionally, based on the announced rates, in order to capture the market, Ethereum's ETF rates will be lower than Bitcoin's ETF, all below 30 basis points.

Source: Deribit (as of 2 JUL 16:00 UTC+8)

Source: SignalPlus

Data Source: Deribit, overall distribution of ETH trades

Data Source: Deribit, overall distribution of BTC trades

Source: Deribit Block Trade

Source: Deribit Block Trade