Yesterday, strong economic data from the United States prompted the Atlanta Fed’s GDPNow model to raise its forecast to 2.9%, far exceeding Wall Street’s predictions. Meanwhile, concerns about inflation intensified, with the two-year Treasury yield nearing the 5.0% mark place, and the 2–10 real yield curve steepening to its highest level since the end of 2022.

At this juncture, Federal Reserve Chair Powell and other officials took the stage to acknowledge that recent data indicated insufficient progress in inflation this year and that restoring confidence in inflation might take longer than expected. In contrast, Bank of Canada Governor Macklem stated on the same day that the Bank of Canada does not need to follow the actions of the Federal Reserve. In Europe, ECB President Lagarde also made remarks indicating a potential rate cut unless there are significant unexpected events. The Federal Reserve appears to be in a somewhat isolated position.

Source: Investing, The two-year Treasury yield, sensitive to interest rate policies, is on the brink of breaking through the 5.0% threshold.

In the realm of cryptocurrencies, BTC rebounded from $62,000 to $64,000 early in the morning, but experienced a decline after options settlement. However, such price fluctuations have been observed almost daily this week. The early cashing out of profits by miners before BTC halving was within expectations, as significant declines have occurred before the last three halvings. Yet, miners’ influence has diminished compared to previous years, and this time, the price increase is also backed by ETFs, allowing the recent 17% drop to be quickly absorbed by the market. Although Vol Skew remains low, the rise in IV at the front end of options has almost been offset today. A trader from CrytoQuant commented, “The correct approach now is to enter the market gradually at previously identified strategic points. The path to the current cycle’s peak remains open, and we are still at the beginning of this journey.”

Source: SignalPlus;NewBTCs
Source: SignalPlus, Front-end ATM volatility retreats.

However, there’s a risk point in ETH that has caught the market’s attention. According to Defillama data, there is around $52.5 million worth of on-chain lending will be liquidated near $2904 (a -5.5% drop from now), involving approximately 18,000 ETH, which could further drive down the price amidst liquidation. This risk has attracted short-term buying for 2900-P options.

Source: Defillama, there is a $52.5 million on-chain liquidation in ETH around 2904.

Speaking of trading overall, the ETH front end is still primarily dominated by strategies with a bearish Delta, with limited bullish sentiment expressed in the forward market. On the BTC side, buying Puts at the front end remains popular, but some buying of Calls on dips has gradually returned in the past 24 hours.

Source: Deribit (As of 17APR 8:00 UTC)
Data Source: Deribit, Distribution of BTC trading maturities.
Data Source: Deribit, Distribution of ETH trading distributions.
Source: Deribit Block Trade
Source: Deribit Block Trade

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