After Trump’s endorsement of cryptocurrencies during his speech at the Bitcoin 2024 Summit on Sunday, news broke the following day that the U.S. government was transferring a large amount of Bitcoin. This potential sell pressure led investors to adopt a risk-off sentiment, causing BTC to fall from a high of $70,000 back to around $66,000. Inflows into BTC ETFs also declined, but we saw strong positive inflows into ETFs led by Blackrock ETHA, which offset the selling pressure from Grayscale ETHE. On July 30th, the flow turned positive, providing confidence for price stabilization.
Source: Farside Investors
Today, investors are keenly focused on the FOMC meeting at 2 AM. The daily/bi-daily options have already priced in this uncertainty with a high premium. However, the uncertainty of this meeting does not stem from the decision-making itself. According to surveys from international media, nearly all economists expect no change in interest rates. More attention should be paid to Powell’s statements at the press conference that follows. The market expects the Fed might subtly alter its statement to acknowledge recent improvements in inflation and labor market balances. While no significant enthusiasm for rate cuts is expected at this meeting, there might be initial hints of a possible rate cut in September, along with guidance on what indicators to watch next. Investors seeking more explicit signals may have to wait until the Jackson Hole Economic Symposium in August, where the Fed Chair will speak and potentially announce significant information.
Source: SignalPlus, Economic Calendar
Source: SignalPlus
In terms of trading, investors heavily purchased put options for protection on ETH for August 2nd, while selling a significant amount of call options in the near to medium term, leading to a decline in Vol Skew during this period. On the BTC side, the market sold call options for August 2nd, capitalizing on the premium brought about by the uncertainty of the FOMC. At the same time, there is ample demand on the far-end top side, exemplified by the purchase of 1000 call options for September at a 95,000-C strike, a Long Risky at 85,000 vs 55,000, and a rollover of call options from December at 65,000 vs 100,000, which pushed up the premium on the topside wing, causing the far-end Vol Skew to lean towards call options.
Source: Deribit （As of 31 JUL 8: 00 UTC）
Data Source: Deribit Overall Distribution of ETH Trading; SignalPlus 25 dRR
Data Source: Deribit Overall Distribution of BTC Trading; SignalPlus 25 dRR
Source: Deribit Block Trade
Source: Deribit Block Trade
