Analysis: The Federal Reserve's interest rate cut is beneficial for short-term government bonds, but the liquidity in the cryptocurrency market remains sluggish at the end of the year.
According to analyst Adam's latest post on X, the recently concluded Federal Reserve meeting announced a 25 basis point interest rate cut and simultaneously restarted short-term government bond purchases, aiming to inject liquidity into the financial system. From a macro perspective, this easing combination undoubtedly benefits risk assets, including cryptocurrencies.
However, the analyst believes that the market should not prematurely interpret this move as the starting point of a new round of quantitative easing (QE) bull market. This is because we are currently in the Christmas holiday period and the annual settlement is approaching, leading to significantly weakened overall liquidity in the cryptocurrency market and low activity levels, which fundamentally restricts the momentum for a major bull market in the short term.
Data shows that by the end of December, the cryptocurrency options market has accumulated over 50% of options positions, with Bitcoin's maximum pain point at the $100,000 mark and Ethereum at $3,200. In terms of volatility, the implied volatility (IV) for all major terms this month has shown a downward trend, indicating that market expectations for this month's price fluctuations are gradually cooling.
Additionally, this month's Skew (implied volatility skew) indicator has remained in the negative skew range, with the prices of bearish options (Puts) significantly higher than those of bullish options (Calls) during the same period, reflecting the current market's overall stable operation and the mainstream adoption of covered strategies, as well as indicating that more traders are choosing to hedge market downside risks through the allocation of put options.
In summary, the current cryptocurrency market is in a complex window period where macro policy tailwinds have arrived, but the micro market structure and liquidity conditions do not support an immediate reversal of the market. Although the possibility of sudden market news causing a rapid reversal cannot be completely ruled out, it is more likely that the market will continue to experience low sentiment, poor liquidity, and a state of trading time for space.
