At the beginning of this year, the market’s expectations for a Federal Reserve rate cut in 2024 were generally around 150 basis points. However, part of this expectation was based on the possibility that continuous rate hikes by the Fed might lead to a recession in the US economy. Yet, numerous data released this year have shown the US economy to remain strong, and the trend of declining inflation has also slowed down slightly. Consequently, the market has been gradually adjusting these previously overly optimistic expectations for rate cuts, waiting for more new data. Tonight, the Fed’s favored inflation indicator, the PCE, will be published at 21:30 UTC+8, further revealing the current price pressures. Yesterday (Feb 27), the market was relatively quiet, with the three major US stock indices showing mixed results: the S&P 500 and Nasdaq increased by 0.17% and 0.37% respectively, while the Dow Jones decreased by 0.25%.

Source: SignalPlus, Economic Calendar
Source: Binance & TradingView

In the realm of digital currencies, BTC continues its upward momentum challenging the $60,000 mark, with ETH also reaching around $3,350. The post-settlement rally has led to another flattening and upward move in option implied volatility (IV), with the front end reaching a high of 70% Vol. The Vol Skew has also noticeably increased. Looking back at the past 24 hours of trading, the BTC front-end 60000-C has been heavily purchased, while after the end of March, the trades mostly involved large block trades of selling 60000-C call spreads, with the bullish leg’s strike prices distributed at 65,000/70,000/75,000. ETH Buy 8 MAR-3000-P has become a market focus, with a single transaction amounting to 19,000 ETH.

Source: Deribit (As of 28 FEB 08: 00 UTC)
Source: SignalPlus
Source: SignalPlus
Data Source: Deribit, BTC transaction distribution
Data Source: Deribit，ETH transaction distribution, Buy 8 MAR-3000-P becomes the market focus.
Source: Deribit Block Trade
Source: Deribit Block Trade

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