Hello everyone, this is my first post on Academy. I plan to write a post every week going forward. Please understand if you are not satisfied with my writing!
At the latest, now is the time to change the bias – Disbelief
BTC is currently in an upward trend. After the fake ETF approval news it broke $28,000 and after that we hit $30,000 in no time. This is the signal where the trend has changed. Additionally, many options traders have started buying call options. As I said on Twitter, every dip is bought quickly. We still waited for the dip but it didn’t come. In fact, when BTC is in a strong upward trend, there are no dips and it tends to continue rising
BTC continues to rise exactly as I said a month ago. Any dips were quickly bought. It’s perfect Disbelief. I once said this in a public chat room.
“Imagine if there were no sellers and only buyers before the ETF was approved.”
Although the stock market is sometimes driven by narratives, the crypto market is a market where psychological factors have a very strong influence. When the ETF was announced last June, there was a lot of time left until final approval, and there was a strong thought in people’s minds that it would be rejected. However, ETF approval is now imminent. Anyway, at this point we know we will be 100% approved. It’s a matter of timing. Changing the bias is very difficult.
CME positions have grown very quickly and I think we should now pay attention to CME data as well. TradFi began participating in this market faster and stronger than expected. From this, we can say that the ETF effect was very strong.
As I always say, macros just need to interpret the important points. The year of macro 2022 is already over. There is no reason to focus solely on that and trade anymore. Gold is also showing a very good rise. The change in correlation has already started before and we are seeing the effects now.
I have two scenarios, but I am very considering the time period factor. Because ETF approval takes place between January 5th and January 10th. Until then, it is likely that the current trend will be maintained.
- BTC moves sideways here and continues to rise higher, reaching the 47-48k target
- After BTC corrected to 3xxxx, reached 47-48k after pump from late December to ETF approval
The 40k+ initial goal has been achieved and I expect BTC to eventually target with or without a dip. I think BTC will maintain the trend and reach the target price of 47-48k if there is no significant price drop until the end of December. (period factor I am considering)
There are currently no derivatives positions and I plan to wait a little longer. If the market gives me a good situation, I will give it a try. Remember, as the price rises and there are more pumps, it is time to reduce your leveraged positions.
Volatility
For half of 2023, the price of BTC increased, but the vol continued to decrease, that is, the vol maintained a downward trend. Even if vol temporarily increases, the price continues to move sideways, so vol also returns to its original level. It was a very boring market with an average vol of 30-40.
However, current vols remain elevated since BTC surpassed $28,000 following the announcement of the approval of a fake ETF in October. If we were previously at the 30-40 level, now we are at the 50-60 level.
Since the announcement of BlackRock’s spot ETF last June, the 3M/6M long-term skew has continued to show demand for calls. Market participants clearly had expectations about the ETF, and as time passed, the approval of the ETF became almost certain.
As a result, market participants’ demand for OTM wing options increases, and call options remain relatively expensive compared to put options. VRP also stays positive. Traders’ sentiments have changed!
Yesterday’s big rise in BTC has left December call option holders starting to lock in profits. Also, the market’s attention is now turned to January. Looking at the term structure, January vol is relatively high, indicating interest from traders. ETF approval is expected to occur between January 5 and January 10, so it is natural to be interested in that period.
Although the price is continuously rising, the spot-vol correlation is not good, so If you want to bet on an uptrend, I think call spreads or butterfly are good options.
Coincall Zero Options Spread
What is most important to every type of trader? It’s liquidity. The biggest problem in the current crypto options market is liquidity (spread). Poor liquidity prevents options traders from buying or selling options at good prices. Also, even when you close a position with a profit, you may incur a small loss due to the wide spread and cannot guarantee a 100% profit. Additionally, options trading has some difficulties unlike futures trading. Due to these issues, options trading has always been unpopular in the crypto markets. (Stock market options proportion 26%, Crypto market options proportion 4%)
Recently, our CoinCall exchange launched a 0 spread. Currently, CoinCall Exchange is the only exchange in the crypto options market that supports 0 spread. I am sure that it will be a very good experience to learn basic option knowledge about options that are considered difficult at Coin Call Academy and trade at USDT settlement and 0 spread. Try it!
Baka!
Ok