Key Takeaways
Bitcoin Risk Signal near high-risk zone threshold, could we see one dip below $27k?
Derivatives suggest the market is cautiously shorting.
Alts look oversold like bitcoin. We believe the bottom is close.
We discuss a narrative that is outperforming and a strategy for this environment.
The Bitcoin Risk Signal is near the high-risk zone threshold (25), yet bitcoin remains in check within the $27k range. Volatility is relatively low with expected moves ranging from $360 to $930 dollars per 4-hourly and 1-day candles respectively.
The question remains: will go lower before racing toward $35k? Macro headwinds strengthening, but the cross-asset structure suggests a bullish risk asset outlook.
Looking at the derivatives market we can get a sense of cautiously shorting (downside protection). The upside is greater than the downside, but it may take longer to get there ($35k) and there could be one last correction.
The options market suggests put prices getting more expensive relative to calls (1m 25D Skew increasing), and deribit shows increased call selling and put spreads executed. All signs of a cautiously short market.
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