Greeks.live: The momentum to restart the bull market is limited, and a slow decline is the most mainstream view in the options market.

【Greeks.live: Limited Momentum for Restarting the Bull Market; Slow Decline Is the Mainstream View in the Options Market】Greeks.live macro analyst Adam posted on social media that at the recently concluded Federal Reserve meeting, a 25 basis point cut was expected, and the Fed announced plans to restart the purchase of $40 billion in short-term US Treasury (T-bills). The dovish stance can effectively supplement liquidity in the financial system and is clearly positive for the market.
However, it is premature to reinstate QE and restart the bull market now. With Christmas and the year-end settlement approaching, historically, this period is when liquidity in the crypto market is at its lowest, market activity is relatively low, and the motivation to restart the bull market is very limited.
Looking at cryptocurrency options data, currently, more than 50% of options positions are accumulated by the end of December. The main pain points for BTC are at the $100,000 mark, and for ETH at $3,200. The implied volatility (IV) for major maturities has been decreasing throughout the month, indicating that market volatility expectations for this month are gradually diminishing.
Notably, Skew has shown a persistent negative bias this month, with puts priced significantly higher than calls at the same delta. This is mainly due to two reasons: first, a stable market environment with covered call strategies once again dominating, artificially lowering call prices; second, recent crypto market weakness, with many traders using put options as protection against declines.
In summary, the crypto market is currently quite weak, liquidity at the end of the year is also poor, and market sentiment is subdued. Slow decline remains the mainstream view in the options market, but investors should also be cautious of sudden positive news that could trigger a reversal (although this possibility is relatively low).