Recently, as expectations for a rate cut by the Federal Reserve diminished and tensions in the Middle East escalated, investors shifted towards safe-haven assets. The three major US stock indices fell by around 1.5%, while the US dollar index briefly rose above 106. US bond yields rebounded after pulling back from their weekend highs, with the current two-year and ten-year yields standing at 4.94% and 4.577%, respectively.

Source: SignalPlus, Economic Calendar

Geopolitical conflicts also affected the cryptocurrency market. Bitcoin plunged from $69,000 to $59,000 last Friday, resulting in over $1 billion in futures long liquidations within 48 hours. The market attributed part of the subsequent rebound to the formal approval by the Hong Kong Securities and Futures Commission (SFC) of Bitcoin and Ethereum spot ETFs, which boosted market confidence. Not only did Hong Kong approve Ethereum spot ETFs ahead of the US, but it also allowed the ETFs to be bought and redeemed in physical form.

Source: SignalPlus & TradingView

During this price decline, cryptocurrency “whales” heavily bought into ETH at its low point. For example, an address starting with “0xE34” seized the opportunity to increase its position by $3.15 million, buying 1000 ETH at the lowest point, bringing its total position to 8300 ETH.

Source: Twitter

In terms of options, despite the price recovering nearly half of its losses, implied volatility remains high, with ETH’s volatility trading about 10% higher than BTC’s. The term structure remains inverted, with Vol Skew at its low point over the past three months (25th percentile).

On the trading front, there were significant Long Put Spread positions in BTC on April 19th and April 26th, possibly providing further protection against the volatility stemming from the halving event on April 18th-20th. On the other hand, price adjustments attracted traders to buy on dips, especially towards the end of May, with bullish options positions, such as Buy BTC 69000-C (850 BTC) and ETH 3800-C (10,542 ETH), becoming the market focus.

Source: Deribit (As of 12APR 8:00 UTC)

ource: SignalPlus, ATM Vol Continues to Decline

Data Source: Deribit, BTC Trading Distribution

Data Source: Deribit, ETHTrading Distribution

Source: Deribit Block Trade

Source: Deribit Block Trade