The highly anticipated US CPI print came in line with expectations. The market is now pricing in 62.5% for 25bps cut compared to 47.5% before CPI announcement.
The softer CPI numbers resulted in an immediate knee jerk reaction in equities and crypto.
The crypto rally was short lived with the market selling off on the back of U.S. transferring 10K BTC to Coinbase Prime and Jump offloading 17,000 ETH.
As anticipated, BTC and ETH front-end vols sold off post-CPI, dropping around 10 vols. Risk reversals also dipped further to -8 and -6 vols for ETH and BTC respectively. This indicates that the options market is now anticipating more downside due to the fresh supply.
Trade Idea
In this thin and highly leveraged environment, any price movement will be amplified. A Digital Win-Range strategy offers an attractive risk-reward trade.
BTC Win-Range (Top Side)
- Get paid 4x if BTC fixes within the range.
- Payout: 4x
- Maturity: 27 SEP 24
- Range: 65k to 70k
BTC Win-Range (Down Side)
- Get paid 5x if BTC fixes within the range.
- Payout: 5x
- Maturity: 27 SEP 24
- Range: 50k to 45k
Spot Ref: 58,700 BTCUSD