Greeks.live: Limited momentum to restart the bull market, slow decline is the mainstream view in the options market

Jinse Finance reported that Adam, a macro analyst at Greeks.live, stated on social media that in the recently concluded Federal Reserve interest rate meeting, there was an unsurprising rate cut of 25 basis points. The Fed announced it would resume purchasing $40 billion in short-term U.S. Treasury bills (T-bills). This dovish stance can effectively supplement liquidity in the financial system and is undoubtedly a clear positive for the market. However, it is too early to talk about restarting QE and a new bull market. With Christmas and annual settlements approaching, this period has historically been the time of lowest liquidity in the crypto market, with low market activity and very limited momentum to restart a bull run. Looking at crypto options data, currently, over 50% of options positions are concentrated at the end of December. The maximum pain point for BTC is at the $100,000 round number, and for ETH, it is at $3,200. The implied volatility (IV) for all major expiries this month is on a downward trend, indicating that the market's expectations for volatility this month are gradually decreasing. It is worth noting that Skew has shown a sustained negative bias this month, with Put prices significantly higher than Calls of the same Delta. This is mainly due to two reasons: first, the market is stable, covered call strategies have once again become mainstream, and Call prices are being artificially suppressed; second, the recent weakness in the crypto market has led to more traders using Put options to hedge against declines. Overall, the crypto market is currently rather weak, year-end liquidity is also poor, and market sentiment is sluggish. A slow decline is the mainstream view in the options market, but at the same time, one should also guard against a sudden reversal brought by unexpected positive news (although the probability is relatively low).