PANews reported on October 21st that Chloe (@ChloeTalk1), a columnist for HTX DeepThink and a researcher at HTX Research, analyzed that the current crypto market is influenced by a trifecta of macroeconomic policies, regulatory developments, and investor sentiment. The US federal government has been shut down since October 1st due to the failure to pass an appropriations bill. The Senate's tenth attempt to advance temporary funding in 16 days still failed to reach the 60-vote threshold. This means the government shutdown will continue, and most economic statistics will be suspended.
However, the Bureau of Labor Statistics stated that it will still release the September CPI on October 24th to meet the annual Social Security increase. This report is the only major data release before the Federal Reserve's interest rate meeting on October 28-29, where investors almost unanimously expect another 25 basis point rate cut. Fed Chairman Powell stated that the balance sheet reduction "may be nearing its end in the coming months." He pointed to signs of tightening liquidity, such as rising repo rates, as encouraging market confidence that monetary policy will be further eased.
The options market is clearly bullish: call contracts account for nearly 60% of open interest, representing approximately 246,000 BTC, while put contracts account for approximately 165,000. Open interest is near record highs, primarily targeting strike prices of $140,000, $200,000, and $120,000, expiring on December 26th. Among short-term options, the 124,000 and 128,000 call contracts expiring on October 31st saw the most trading volume, while the 108,000 put contract on October 24th was used for hedging. Weekly at-the-money implied volatility has risen from 30% to approximately 40%, but the monthly volatility has only increased by about 2.5%, suggesting that the market anticipates a relatively orderly rise.
Overall, the government shutdown has created a data vacuum, but the Fed's dovish stance and the end of its balance sheet reduction efforts have supported risk assets. Midterm elections and legislative uncertainty are encouraging both institutional and retail investors to pre-position their positions, leading to strong bullish sentiment in the options market. However, if CPI unexpectedly rises or the shutdown further drags down the economy, short-term volatility could intensify.
