Will the end of the year $BTC surge or plummet? Smart money is actually more afraid of this situation 👇🏼👇🏼

👩🏻‍💻 Tonight, I will analyze the latest futures market structure data. From the pricing in the options market, the year-end trend doesn’t seem like it's about to take off or crash, but rather like a sideways holiday, though funds are clearly defending against a drop!

🤔 What do IV and Strikes say?

The at-the-money options during Christmas week aren’t too expensive, but when it drops significantly, they become super expensive!

- The market thinks: under normal circumstances, there won’t be crazy volatility.

- However, if it truly drops deeply, everyone is willing to spend a lot of money on insurance!

➡️ Traders don’t think every day is very turbulent, but are very afraid of a sudden large drop.

🤔 What does Skew say?

- 12/18: Negative skew indicates that the market is willing to pay a higher premium for put options to protect against downside risk.

- 12/23: The absolute value of skew becomes less negative, and traders' panic over a short-term crash before the year-end has eased somewhat, but overall they still lean towards paying for downside risk.

🤔 What does the open interest on Deribit expiration represent?

- A large amount of “insurance” in the year-end market is concentrated on the 12/26 expiration. Before and after expiration, prices may sometimes be more easily “stuck” near a certain range due to concentrated positions, and market makers' hedging will generate buy-sell flow.

➡️ This indicates that the main risk before the year-end remains downward rather than a surge, but once the market goes down, volatility may rise rapidly.

🔎🔎 Comprehensive inference

✅ The end of the year looks like a “holiday market,” likely to be volatile

✅ Traders are more willing to spend money to guard against drops

✅ If it drops, it may be a sudden drop

✅ After the New Year, the market will probably balance out a bit

Data source: deribit, Amberdata, checkonchain 🙏🏻

Note: This article is for information sharing only and does not constitute any investment advice. Market data comes from public information and may adjust with market changes.