Yesterday (January 8th), Atlanta Federal Reserve President Bostic (a voting member of the FOMC in 2024) gave a speech, reiterating that it is appropriate to cut interest rates by 25 basis points twice by the end of this year. He expects the Fed to make its first rate cut in the third quarter, while also mentioning that the current pace of balance sheet reduction is appropriate, and whether it should be changed is an open question. However, Federal Reserve Governor Bowman mentioned in her speech that there is still a risk of inflation rising, mainly due to geopolitical factors and the relaxation of the financial environment. U.S. Treasury yields showed a V-shaped reversal, first dropping and then rising. The ten-year yield rebounded after probing below 4% again, now standing at 4.046%, and the two-year yield is at 4.377%. All three major U.S. stock indices closed higher, with the Dow Jones, S&P, and NASDAQ rising by 0.58%, 1.4%, and 2.2%, respectively. In terms of crude oil, a significant price cut by Saudi Arabia and an increase in OPEC production sparked investor concerns about oversupply, leading to a sharp fall in international oil prices, with WTI and Brent crude closing down by 4.13% and 3.22%, respectively.

Source: SignalPlus, Economic Calendar

In the cryptocurrency sector, BTC strengthened again, at one point surging over 10% to break through the $47,000 mark, while ETH maintained a weaker correlation, briefly exceeding $2,300 before slowly falling back below it. In the options market, after the price rise, the implied volatility was significantly reduced overall, with a decrease of about 2–3% in the longer-term, and the front-end IV even plummeted by 15–20% Vol. Moreover, with the expiration date of 11 JAN 24 approaching, the volatility curve’s high point shifted from 12 JAN 24, which had maintained it for a long time. Additionally, from the perspective of the curve slope, BTC’s strong upward movement caused the front-end Vol Skew to return to zero. In contrast, ETH Vol Skew overall continued to decline, with its 25 dRR before March now all negative. In terms of trading, the price breakthrough boosted transactions in bullish strategies, with bullish spread strategies significantly dominating the bulk market. ETH saw more buying within January, while BTC transactions occurred in the later months of February and March, waiting for the development of the ETF event.

Source: Binance & TradingView
Source: Deribit (As of 9 JAN 16: 00 UTC+ 8)
Source: SignalPlus
Source: SignalPlus
Source: Deribit Block Trade
Source: Deribit Block Trade

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