During this week’s FOMC meeting, the official statement and dot plot from the Fed caused a hawkish impact on the market. Projections indicate only one rate cut in 2024, with year-end core PCE inflation expected to reach 2.8%, higher than the previous forecast of 2.6%. However, Powell later in an interview shifted back to a dovish stance, pointing out that most officials did not consider the recently released CPI data that fell below expectations. Traders are more inclined to focus on the positive implications of the CPI data rather than the FOMC statement, leading to a consecutive decline in the 10-year Treasury yield to 4.20% and a new high in the US stock market.
In the realm of digital currencies, the correlation between BTC and the macro environment/US bonds briefly decoupled. Significant outflows were observed in ETFs, with FBTC and GBTC seeing outflows of $106.4 million and $61.5 million respectively, while ARKB under Ark saw an outflow of $53 million. As of now, the net outflow for this week has reached a staggering $564 million.
Additionally, renowned trader Peter Brandt shared his insights on the recent trends. He believes that if there is no short-term rebound, downward pressure on the coin price will persist. Furthermore, from a technical analysis standpoint, if the BTC price falls below the $65,000 support level, it is likely to continue towards the $60,000 mark, with the next step potentially dropping to the low point of $48,000. While BTC has failed to challenge new highs for three consecutive months and bearish sentiment in the market remains, Brandt still points out the potential for an upward trend, emphasizing patterns like “Hump with a Slump then a Pump and a Dump” that often occur before a bull market.
In terms of options, implied volatility spiked to intraday highs during midday, with bullish volatility strategies such as the 28 JUN 24 66000-68000 Long Strangle for BTC appearing. There was also significant buying of Call/Put Outright positions for the 21 JUN 24 contracts. However, an hour before settlement, there was a sudden change in sentiment, with IV quickly giving back all intraday gains. This period also saw a Short Vol strategy on 21 JUN 24 BTC and a significant selling of bullish options flow on ETH, resulting in an overall decline of around 1%.
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