At 8 pm on October 10, in a live broadcast on Matrixport's official YouTube channel, the head of Matrixport Asset Management analyzed the reasons behind the sharp fluctuations in the prices of BTC and ETH last week (October 1-October 9) under the influence of the global macro-economy, liquidity changes, and market sentiment. He also discussed the institutional behavior of the current options market and provided investors with investment directions and strategy recommendations that can be paid attention to in the future.
The live broadcast content is as follows:
In the first week of October, the price of BTC fell from $61,000 to below $60,000. The reason behind this is that the uncertainty of the global macro-economy has intensified, and the crypto asset market has faced selling pressure from multiple aspects. The return of funds caused by China's policy changes has also increased market pressure, dragging down BTC's short-term rebound.
Analysis of the causes of market fluctuations
Fluctuations in the macroeconomy and market sentiment
The recent performance of global stock markets has also had a significant impact on the crypto market. A-shares rebounded slightly under the stimulus of policies such as the People's Bank of China cutting reserve requirements and adjusting mortgage interest rates, but this did not provide strong support to the crypto market. On the contrary, due to the return of capital flows to traditional financial markets, the return of global funds to traditional markets has increased the downward pressure on crypto assets.
The linkage between the US stock market and the crypto market
The US non-farm payrolls data exceeded expectations, and the strong data pushed the US stock market to rebound, which in turn led to a short-term upward trend in the price of BTC, which is highly correlated with the US stock market. However, unlike gold as a safe-haven asset, BTC is more prominent as a risky asset. Against the backdrop of increasing global geopolitical risks, gold prices have risen as tensions in the Middle East have risen, but BTC has failed to demonstrate its safe-haven properties. Instead, it has fallen simultaneously with the correction of US stocks, indicating that the market regards it as a high-risk investment product rather than a safe-haven tool.
In this rebound, small and medium-sized tokens (altcoins) outperformed BTC, indicating that risky assets performed better during the capital inflow. This also shows that the speculative nature of the crypto market is still strong, and market liquidity is more concentrated in small-cap assets with high volatility.
Technical aspects and the impact of market selling pressure
From a technical perspective, BTC is fluctuating around $60,000 and has failed to effectively break through the resistance level between the 50-day and 200-day moving averages. Every time the market rebounds above $61,000, it is accompanied by strong selling pressure. This shows that the market is still digesting large-scale selling pressure and has not yet formed a stable upward trend.
As for ETH, after a sharp drop in the previous period, the price has fallen below $2,000, and market demand remains weak. Although ETH's decentralized applications have strong fundamental support, the current reduction in on-chain activities and weak demand in the DeFi field have dragged down ETH's price performance. Its price performance is far worse than BTC, showing that ETH has not yet escaped downward pressure in the short term.
Options Market and Institutional Behavior in the Current Context
Volatility and institutional behavior in the options market
As global macroeconomic uncertainty increases, volatility in the options market has also increased significantly. Especially in the context of the approaching US election in November, the volatility expectations in the options market have become more obvious, and institutional investors use the options market to hedge the risk of future market fluctuations.
Options market data shows that short-term volatility remains low, but volatility expectations for November have increased significantly, especially before and after the election when volatility reached its highest value of the year. This shows that the market is extremely concerned about the impact of political events, and institutional investors use the options market to make early arrangements to avoid the risk of severe market fluctuations. For example, some large institutions increase the size of option trading around option expiration dates (such as late September and early October) and hedge future price fluctuations through a "two-way strategy" of purchasing call options and put options.
This "double-buy strategy" allows institutions to profit whether the market is rising or falling when there are large fluctuations. At the same time, the launch of the US Bitcoin ETF has also attracted more traditional financial institutions to participate in crypto asset options trading, driving the activity of the options market.
Funding rate changes and market sentiment
From the perspective of funding rates, arbitrage opportunities in the crypto market are gradually decreasing. The funding rate arbitrage income was high at the beginning of the year, but it has now dropped to about 8%, which is not much different from the yield of US Treasury bonds. This shows that the risk-free arbitrage space is shrinking, especially in the context of changes in the global interest rate environment, funds are more inclined to flow into traditional financial markets, further exacerbating the capital flow pressure in the crypto market.
This phenomenon shows that the liquidity of the crypto market is relatively tight in the short term, the market volatility is increasing, and institutional investors are more inclined to use the options market for volatility trading to obtain relatively stable returns.
Investment directions to watch
Volatility Advantage Strategy: An Effective Tool for Dealing with Market Volatility
Volatility expectations in the current market are increasing, especially as the US election approaches, volatility will rise further. This provides investors with opportunities to optimize returns through volatility trading. During October and November, the volatility curve in the options market showed that the market's expectations for uncertain events increased, especially the demand for hedging political risks surged.
In the current environment, the volatility advantage strategy is an effective risk management tool. By purchasing a combination of call options and put options, investors can profit from volatile markets, whether the market is rising or falling.
Passive Strategy: Advantages of M-BTC Covered Call Strategy
In the face of the frequent market fluctuations, the M-BTC covered call strategy launched by Matrixport is an effective and stable income tool designed for investors who hold BTC for a long time. This strategy allows investors to obtain stable option fee income by holding BTC spot and selling BTC call options.
One of the main advantages of this strategy is its high transparency and low risk. The covered call strategy is particularly suitable for investors who are unwilling to bear the risk of high-frequency trading. Through this strategy, investors can obtain stable passive income in volatile markets, and compared with simply holding BTC, this strategy can effectively reduce losses caused by large market fluctuations.
For example, during market volatility, investors holding BTC spot can earn option fee income by selling call options every two weeks. If the BTC price rises above the set strike price, investors may lose some of the upward gains, but the overall return is still stable and attractive. This strategy is particularly applicable when the market is volatile and investor expectations are uncertain.
In addition, compared with traditional pledge lending, the covered call strategy does not require additional margin and has relatively low financing costs, making it an efficient financing and income management tool.
Summarize
In the current context of increasing global macroeconomic uncertainty, investors should pay more attention to risk management and stable return strategies. The long-term trends of BTC and ETH are still attractive, but the market is volatile in the short term, and investors need to flexibly use option strategies to avoid risks and increase returns.
Matrixport will continue to launch more innovative financial products to help investors achieve steady appreciation of their assets in the current complex market environment. Through passive strategies like the M-BTC covered call strategy, investors can ensure stable returns in volatile markets without losing potential growth opportunities.
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About Matrixport Weekly Market Insights
【Matrixport Weekly Market Insights】is a new interactive knowledge sharing column launched by Matrixport, which is broadcast live on the official YouTube channel of Matrixport every week. This column will regularly invite industry product leaders, top analysts and KOLs to discuss investment logic under different market conditions, share investment experiences, and help users realize asset appreciation.
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Disclaimer: The above content does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy to residents of the Hong Kong Special Administrative Region, the United States, Singapore, and other countries or regions where such offers or solicitations may be prohibited by law. Digital asset trading may be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
