Market

In the last analysis, it was thought that the rise would stop around 61.4k in the short term, but BTC showed a much stronger and faster rise than that. Everyone would probably be surprised… Even the Bulls. Over the weekend, I confirmed that the $61,500 level (orange line) based on Coinbase was maintained and bought a call option targeting $65,000 and was successful.

From now on, I think we’re beyond the realm of prediction. Let’s think about a few possibilities.

  1. New ATH failure
  2. Start of adjustment after New ATH
  3. Additional rise to $7x,xxx level after New ATH

Although anything can happen, I am looking at the market as the third possibility out of three. I think there will be a movement to renew the high again here. It is unknown at what level the BTC rise will stop, but I expect it to reach the $72,000 to $74,000 level.

ETH/BTC found the 0.053 level to be the most important and showed a nice bounce from that level. I believe that ETH, which has continued to rise slightly compared to BTC, is likely to continue its current pattern of showing large rises at specific times in line with the BTC trend. Additionally, with the BTC ETF being more successful than expected and showing stronger demand, people’s expectations for the ETH ETF are likely to be higher than last year.

The market capitalization of USDT (Tether) has exceeded $100B! Liquidity is returning to the crypto markets.

From now on, the market is in the realm of appropriate responses to the ups and downs, and clearly the market is a bit overheated. What we need to remember is that high funding does not mean a 100% immediate drop. If we think about this the other way around, we can interpret the thoughts of most market participants as being very optimistic. However, at some point there will inevitably be a decline and funding will be reset. Although no one knows when.

Except for a few altcoins, most altcoins are still weak compared to BTC and ETH. If BTC falls at any moment, it is likely to lead to large losses, so it is recommended that leveraged positions continuously manage risk and continue to secure profits if profits are generated. (Not applicable to spot positions)

ETF Flow

Simply put, it shows the still insane demand for ETFs. IBIT also added $420M yesterday, while FBTC recorded a new record inflow of $404M. It is meaningless to predict when demand will decline. Because no one knows. Just looking at the numbers and facts, it can be said that demand for BTC on TradFi is still strong.

GBTC outflows have briefly increased in recent days, possibly related to Genesis. The GBTC outflow that occurred on Friday, March 1st scared people, but in reality, GBTC is traded through OTC trading and most GBTC is being absorbed into IBIT. People say there is no demand, but the problem is that there is too much demand.

Options Market

BTC rose stronger and faster than expected, making call option buyers laugh as Vol also reacted along with it. The spot-vol correlation was very positive. Vol rose by 20 points, and as BTC quickly approached ATH, people’s demand for options gradually increased.

Continuing from last week, demand for call options is still high in the options market. About 70% of the transactions are call options. Due to high demand, call options are more expensive than put options. The smile curve shows the demand for clear calls.

It is not unusual for options demand to increase. Previously expectations for ETFs, now expectations for the new ATH. These events drive options demand.

As we saw in last week’s analysis, those who sold high strike call options are likely to have been harmed by higher Vol and higher spot prices. Currently, the most popular strike price in the BTC options market is $70,000, which is the largest gamma level for both weekly and monthly options in March.

Considering the risk premium, selling call options looks good. However, I do not want to sell the call option because I believe there is still a chance that a new ATH will be renewed and that it is likely to happen. Please choose according to your trading style! (Not a good or bad issue)

For reference, the options market on CME also set a new record!

Block Trade

BTC $70,000 Short Calls

ETH $3,400 Long Puts

Macro

This Friday, nonfarm payroll and unemployment rates will be announced. Friday’s announcement is likely to have an impact on the markets. Looking at government bond interest rates, it appears that the market is continuing to evaluate the possibility of an interest rate cut. Market movements may move more than expected depending on the announcement.

Respond appropriately!

Have a great week everyone!

NFA DYOR 🙂

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Thoughts