SignalPlus Volatility Column (20240614): ETFs are once again experiencing large outflows

At this weeks FOMC meeting, the Feds official statement and dot plot brought a hawkish impact to the market. Forecasts showed that there would be only one rate cut in 2024, and core PCE inflation was predicted to reach 2.8% by the end of the year (higher than the previous forecast of 2.6%). However, Powell later pulled the discussion back to a dovish stance in the interview, pointing out that most officials did not take into account the lower-than-expected CPI data just released before the meeting. Traders were also more inclined to focus on the positives brought by the CPI data rather than the FOMCs statement. The 10-year Treasury bond fell to the 4.20% mark for several days, and the US stock market hit a new high.

Source: Investing

In terms of digital currencies, BTC briefly decoupled from the macro environment/US debt. ETFs once again saw significant outflows, with FBTC and GBTC losing $106.4 million and $61.5 million respectively, and ARKB under Ark also losing $53 million. So far this week, net outflows have reached $564 million.

In addition, well-known trader Peter Brandt also expressed his views on the recent trend. He believes that if there is no rebound in the short term, the downward pressure on the price of the currency will continue. Furthermore, from a technical analysis, if the BTC price falls below the $65,000 support level, it is likely to continue to fall to the $60,000 mark, and the next step down is the low of $48,000. Admittedly, BTC has failed to challenge a new high for three consecutive months, and the bearish sentiment in the market has not subsided in the short term, but Brandt still pointed out the potential for an upward trend in the future, emphasizing the price trend of Hump with a Slump then a Pump and a Dump that often occurs before a bull market.

Source: Farside Investors

Source: TradingView

In terms of options, implied volatility rose steeply to the intraday high at noon, and bullish volatility strategies represented by 28 JUN 24 66000-68000 Long Strangle appeared on BTC, and a considerable number of Call/Put Outright positions were bought on 21 JUN 24. However, the situation suddenly changed an hour before settlement, and IV quickly gave up all the gains of the day, accompanied by the Short Vol strategy of BTC on 21 JUN 24 and the Flow of a large number of call options on ETH during this period, and the overall price finally closed down by about 1%.

Source: Deribit (as of 14 JUN 16: 00 UTC+ 8)

Source: SignalPlus

Data Source: Deribit, overall distribution of ETH transactions

Data Source: Deribit, overall distribution of BTC transactions

Source: Deribit Block Trade

Source: Deribit Block Trade

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