Greeks.live macro researcher Adam recently briefed the Chinese-speaking community, maintaining a cautiously optimistic outlook on the market. The team suggests that realized volatility (RV) hasn't shown signs of decline yet, recommending a dual-buy strategy for potential profits.
Key Market Observations:
- BTC-M2 Correlation: Traders are closely monitoring the relationship between M2 money supply and Bitcoin's price movement. Since 2024, this indicator has demonstrated partial effectiveness, though opinions vary regarding its long-term reliability.
- SOL Options Liquidity Crunch: SOL options face liquidity traps, particularly for deep in-the-money contracts. This shortage prevents effective DDH hedging and position rollovers, leading to persistent theta decay that scalping strategies can't offset.
Strategic Recommendations for Traders
- Dual-Buy Approach: Capitalize on current volatility conditions by simultaneously purchasing call and put options.
- M2 Monitoring: Track M2 trends while acknowledging its evolving correlation strength with BTC.
- SOL Caution: Exercise prudence with SOL options due to liquidity constraints impacting hedging efficiency.
FAQ: Bitcoin Market Dynamics
Q1: Why is M2 money supply relevant to Bitcoin's price?
A: M2 reflects broader economic liquidity, which historically influences crypto markets during inflationary/deflationary cycles. However, its predictive power varies across timeframes.
Q2: How does the dual-buy strategy work in current conditions?
A: By purchasing both call and put options, traders position themselves to profit from significant price swings in either direction while RV remains elevated.
Q3: What causes SOL options' liquidity issues?
A: Concentrated trading activity around specific strike prices combined with limited market makers creates execution challenges for complex strategies.
Q4: Should long-term investors track M2 trends?
A: While useful for macroeconomic context, M2 shouldn't replace fundamental BTC analysis. Consider it one of several macro indicators.
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Disclaimer: Market analysis represents observational data, not investment advice. Conduct independent research before trading.