SignalPlus Volatility Column (20240423): U.S. stocks rebound, gold prices plummet
Yesterday (22 APR), risk sentiment in the U.S. stock market rebounded slightly, ending the six-day losing streak of the SP 500. The market took a breather ahead of Friday's PCE index, a busy earnings week, and the upcoming FOMC meeting. On the other hand, recent poor inflation data has delayed market expectations for the Federal Reserve to shift to a looser policy. U.S. Treasury yields remain volatile at high levels, forcing global investors to reconsider their anticipated global easing cycle. Some investors are beginning to doubt the European Central Bank's determination to cut interest rates. The money market no longer fully prices in three ECB rate cuts by December. Morgan Stanley analysts noted in a report, "Compared to the previously more aggressive rate-cut path, exchange rate-induced inflation gives us reason to worry about the ECB's rate-cut actions."
Source: TradingView, SP 500
The geopolitical premium on gold prices has gradually faded from the market. Spot gold recorded its largest single-day drop in two years and continued to decline today.
Source: TradingView, XAUUSD
In the digital currency space, ETFs maintained positive inflows, with FBTC inflows exceeding the veteran IBTC for three consecutive days. GBTC outflows also shrank. According to on-chain data analysis firm Artemix, stablecoins have seen net inflows for 15/16 weeks so far in 2024, with last week's net inflows reaching $3.4 billion, the third-highest level this year.
Source: Farside Investors; Twitter
In the past 24 hours, BTC's price broke through from $66,000 to $67,000 before pulling back to around $66,000.
In options, implied volatility has steeply declined. Large block trades in BTC saw two opposing Iron Condor strategies: buying Vol at the end of April and selling Vol at the end of May. Additionally, a large sell-off of BTC June-end call options was observed, mainly influenced by two triangular spreads on the block trade platform. While selling 28 JUN 75000 & 80000 Calls, traders bought 27 DEC 80000-C and 27 SEP 90000-C, possibly reflecting uncertainty around the U.S. election.
ETH trading was relatively concentrated. Big players bought massive amounts of 3100 Puts at the end of April to hedge against the upcoming monthly settlement, while retail investors sold OTM Puts on May 3rd and 31st to collect premiums before IV fully retreated.
Source: Deribit (as of 23 APR 16:00 UTC+8)
Source: SignalPlus
Data Source: Deribit, ETH trading distribution
Data Source: Deribit, BTC trading distribution, massive sell-off of June-end Calls
Source: Deribit Block Trade
Source: Deribit Block Trade
The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.
