Cryptocurrency Market: Christmas and Options Turmoil

I. Christmas Warm-Up

There are signs of recovery in the cryptocurrency market during Christmas, with improved sentiment and prices, and reduced volatility. Some funds are entering the market for short-term trades, possibly positioning for the options expiration on the 27th, but investors should not be blindly optimistic.

II. Options Betting on the 27th

1. Expiration Scale: About 40% of options contracts are set to expire on the 27th, with a large settlement volume, leading to intense long-short confrontations, and the flow of funds affecting the market structure.

2. Position Transfer Situation: Recently, the market has seen position transfers, with volume and open interest moving to next month's contracts, causing implied volatility to decrease as investors position themselves early.

III. Volatility Warning

1. Short-Term Fluctuations: As the options expiration approaches, funds will be repriced, leading to significant market fluctuations and potential price swings.

2. Impact of Position Transfers: Pay attention to the flow of funds from position transfers, as this is likely to set the tone for next month’s market direction.

IV. Investment Strategies

1. Short-Term: Short-term investors should focus on options data and set stop-loss and take-profit orders to guard against sudden changes.

2. Medium to Long-Term: Medium to long-term investors should wait until after the 27th to reassess the market before adjusting their positions.

In summary, while Christmas may feel warm, the options expiration on the 27th poses a significant test, and investors should remain vigilant.

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