The USDJPY pair is stuck in a tight range as traders await the US Consumer Price Index (CPI) report. The US dollar has weakened since the last Non-Farm Payrolls (NFP) report, which was below expectations. This has led many to rethink their views on future actions by the Federal Reserve. Currently, the market expects about 58 basis points of rate cuts by the end of the year, up from 35 basis points before the NFP announcement. The upcoming US CPI report is crucial since recent hints from the Fed suggest a possible rate cut in September. To change this outlook, we would need to see significantly high inflation data paired with strong future NFP results. The Japanese yen (JPY) has strengthened significantly due to the weak NFP data and revised Fed outlook. If US data remains weak or if Japan’s inflation rises, we could see even more strength in the JPY.

Market Consolidation and Key Levels

On the daily chart for USDJPY, the pair is consolidating after the sell-off following the NFP report, looking for guidance from the US CPI report. Sellers are targeting the major trendline near 144.50. The 4-hour chart shows similar consolidation, with recent resistance found at 148.00. Both buyers and sellers are waiting for a breakout. Key upcoming reports include the US CPI, PPI, Jobless Claims, Retail Sales, and Consumer Sentiment, along with more comments from the Fed. The USD/JPY pair is currently trading within a narrow range as we approach the important US CPI report set for tomorrow, August 12, 2025. This situation has caused traders to hold back on making large new positions until they see the inflation data. The dollar has weakened since the July Non-Farm Payrolls report showed only 155,000 job gains, which fell short of expectations. This softer data has pushed the market to price in over 50 basis points of Fed rate cuts by year-end. If tomorrow’s inflation number is surprisingly low, it could reinforce expectations for a rate cut in September. This scenario recalls late 2023, when weak US economic data caused the dollar to decline after a long period of strength. We are monitoring to see if this is another turning point for the currency. Historically, once the Fed changes its stance, the trend can shift quickly.

Opportunities for Traders

The yen has gained from the changes in the Fed’s outlook. Japan’s core inflation rate, which was 2.7% last month, remains above the Bank of Japan’s target, which leaves room for more policy tightening. For the yen to strengthen further, we would likely need continued weak data from the US. For those trading derivatives, buying options ahead of the CPI release could be a smart move. Given the tight trading range, implied volatility has likely dropped, making strategies like straddles or strangles cheaper to implement. This approach allows traders to profit from a significant price movement in either direction without predicting the data’s outcome. We are closely watching the 148.00 level as a key resistance point. Traders with a bearish outlook might want to consider selling futures or buying put options if prices do not break above this level after the data is released. On the other hand, a strong move above 148.00 could indicate a move toward the 151.00 area. The major trendline around 144.50 remains the main target for sellers. If the CPI data comes in much weaker than expected, we could quickly test this level. This area might also be a good opportunity to buy call options with limited risk, anticipating a bounce from long-term support. Create your live VT Markets account and start trading now.

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The Bank of America Fund Manager Survey shows that global investor sentiment is the strongest it has been since February 2025. The likelihood of a hard economic landing is at its lowest since January 2025. Equity allocations are rising but are still managed carefully. A net 78% of respondents expect short-term interest rates to drop within the next year. A trade called “Long Mag 7” is seen as the most crowded by 45% of those surveyed, matching last month’s insights. The survey indicates that 20% believe Waller might become the next Fed chairman, while Hassett is at 19% and Warsh at 15%. Despite this optimism, many feel that inflation is a bigger threat than trade wars. There are worries that the Federal Reserve wants to lower rates at the same time that inflation rises, which could make inflation a greater concern.

Market Conditions Signal Low Risk

Currently, market conditions are viewed as low-risk, with stock prices nearing record highs, tight credit spreads, and anticipated rate cuts. This suggests that there’s little room for mistakes. With investor sentiment soaring since February 2025, the market is priced for perfection. Stock prices are near all-time highs, and many believe rate cuts are guaranteed. The VIX, a measure of market volatility, is hovering around 13, a level not consistently seen since late 2024, indicating a sense of calm in the market. This optimism clashes with the possibility that inflation could rise again, which might delay the Federal Reserve’s planned rate cuts. The latest Consumer Price Index (CPI) reading for July 2025 was 3.4%, slightly higher than expected and marking the second month of increases. A strong economy, combined with the Fed wanting to cut rates, could lead to higher inflation instead of lower.

Volatility Appears Underpriced

Given these conditions, volatility looks underpriced, making protective options strategies more affordable. Buying puts on major indices like the S&P 500 or Nasdaq 100 can serve as a simple hedge against any unexpected bad news. This is particularly important as the market has little room for error. The “Long Magnificent Seven” trade is now widely recognized as crowded, presenting a significant concentration risk. These specific stocks have accounted for over 60% of the S&P 500’s gains so far in 2025. Any change in sentiment could lead to a quick reversal, potentially resulting in large losses for these stocks. We can recall market sentiment in late 2021 when a similar level of optimism faced a sharp downturn once the Fed became more focused on inflation in 2022. The current high expectations and low perceived risk feel similar, which makes seeking downside protection a wise choice in this fragile environment. Traders should consider buying put options on ETFs that heavily feature the Magnificent Seven or on the individual stocks themselves. These positions could gain from either a general market decline or a shift away from the most crowded trade. The low implied volatility makes the cost of such defensive strategies attractive right now. Create your live VT Markets account and start trading now.

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Market Steady Before US CPI Release

European markets and US futures are calm ahead of a key data release. This quiet phase often leads to significant market movements, so traders should brace for a sharp change after tomorrow’s US Consumer Price Index (CPI) report. The market feels like a coiled spring, ready to react to this important inflation data. Analysts estimate tomorrow’s CPI will show a 3.0% year-over-year increase. This is a slight drop from July 2025’s 3.1%. The Federal Reserve wants more evidence of declining inflation before making decisions, so any difference from this estimate could lead to strong market reactions. The CBOE Volatility Index (VIX) is currently around 17, indicating heightened anticipation of shifts in the market. Given the uncertainty, buying volatility through options can be a smart strategy. A long straddle or strangle on an index like the S&P 500 allows traders to benefit from large price swings in either direction after the CPI announcement. This way, you don’t need to guess which way the market will move. In 2022 and 2023, we saw how CPI reports could lead to significant one-day swings. For example, on November 10, 2022, a lower-than-expected inflation report caused the S&P 500 to jump more than 5.5%. This shows just how influential these data points can be on market movements.

Hedging Strategies For Long Equity Portfolios

For those with long equity portfolios, now is a crucial time to think about hedging strategies. Buying put options on SPY or QQQ ETFs can serve as short-term insurance, protecting portfolios from potential losses if inflation is higher than expected. Looking ahead, after tomorrow’s report, the market will quickly focus on the Federal Reserve’s upcoming meeting in September. The inflation data will impact options pricing for that event. Traders should be prepared to adjust their positions as the market responds to the CPI number and reassesses the likelihood of future Fed actions. Create your live VT Markets account and start trading now.

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The Reserve Bank of Australia (RBA) is likely to lower the cash rate from 3.85% to 3.60%. This decision comes after a report showed trimmed mean inflation fell to 2.7% year-on-year, down from 2.9% in the first quarter. Markets expect rate cuts of up to 63 basis points by year-end. However, the RBA is cautious and will likely stick to its current guidance unless inflation and job market conditions change.

Future Rate Cuts and Economic Conditions

The RBA’s future rate cuts depend on inflation and job market trends. If both meet expectations, more cuts could happen; if not, the RBA will remain careful. The neutral rate is thought to be around 3%, though this has not been officially confirmed by the RBA. Key labour market data is due on August 14 and September 18 and will influence future rate decisions. The Australian dollar has limited downside but could strengthen based on new data and the RBA’s actions. The RBA may only implement one more cut after August, highlighting the importance of upcoming economic reports. Last week, the RBA made the expected 25 basis point cut, lowering the cash rate to 3.60%. This was anticipated by the markets after a weak Q2 inflation report. The focus now is on what comes next, as the RBA’s statement was cautious. Market expectations include around 38 basis points of further cuts by the end of 2025, indicating at least one more cut is likely. Still, the RBA is hesitant to indicate its next steps, preferring to gather more data, which differs from market expectations.

Inflation Trends and Market Expectations

Inflation trends are unclear, as July’s monthly CPI rose slightly to 3.8% from June. This slow increase in prices supports the RBA’s caution. It complicates the likelihood of consecutive rate cuts at the September 30 meeting. We’re closely monitoring the job market for signs of weakness. The unemployment rate in July rose slightly to 4.2%, but this gradual increase is not severe enough to push the RBA to act. The upcoming labour market report this Thursday, August 14, will be pivotal in forming expectations. With the recent rate cut already factored into the currency’s value, the Australian dollar has limited downside risk. The chances now lean toward appreciation, especially if the upcoming data exceeds expectations. For instance, a strong jobs report would challenge the need for further urgent cuts. From a trading standpoint, this creates interest in long volatility strategies for the Australian dollar. Given the uncertainty, traders could explore options to prepare for significant price shifts around important data releases. A surprising labour report this week might quickly lead the market to reevaluate the chances of a cut in the fourth quarter. The RBA’s cautious, data-focused strategy is not new, as seen during the easing cycle in 2019. Then, the bank often paused for several meetings to analyze the impact of its cuts before proceeding. This history suggests we shouldn’t expect the RBA to rush into its next move. Create your live VT Markets account and start trading now.

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Today is calm, with no events planned. The main event this week is the US Consumer Price Index (CPI) report coming out tomorrow. The markets may either stay steady before this report or continue the trend seen after the recent dovish comments from the Federal Reserve.

Fed Official Supports Rate Cuts

Over the weekend, a Fed official mentioned the possibility of three rate cuts by the end of the year. He indicated that if the labor market shows more weakness, larger cuts could happen. The recent comments suggest that a rate cut in September seems likely unless inflation data surprises with high numbers and a strong non-farm payroll (NFP) report changes the outlook. Currently, the Federal Reserve seems cautious about ignoring labor market weaknesses. The CPI report tomorrow needs to be better than expected to influence market pricing. Afterward, all eyes will be on further comments from the Federal Reserve and the Chairman’s upcoming speech at the Jackson Hole Symposium, which might indicate their position on a possible September rate cut. Since there’s nothing scheduled today, we are in a wait-and-see mode ahead of the US CPI report. The market may either stay on the same path or continue following the recent softer tones from the Federal Reserve. This quiet time gives an opportunity to prepare for the main event of the week. During the weekend, Fed Governor Bowman endorsed the idea of three rate cuts by the end of 2025, stating that more weakness in the labor market could lead to bigger cuts. This reflects what we saw in the July jobs report, where payrolls only grew by 150,000 and the unemployment rate rose to 4.1%. The Fed seems cautious about risking a more substantial drop in employment.

Market Expectations for September Rate Cut

This dovish sentiment is already reflected in the market, with Fed Funds futures indicating an 85% chance of a rate cut in September. Therefore, a significant shift would require surprising data. We have seen similar situations before, especially with the Fed’s pivot in late 2023 after extending their rate hikes. For tomorrow’s CPI, a year-over-year figure above the consensus forecast of 3.2% would be needed to challenge the narrative of a rate cut. Traders might think about buying short-term options on the VIX or Treasury note futures as a hedge against a spike in volatility if inflation exceeds expectations. A CPI reading at or below prognoses will likely strengthen the current expectation of a cut. Regardless of the inflation data, our attention will shift to comments from other Fed officials and Chair Powell’s speech at the Jackson Hole Symposium later this month. Any suggestion of hesitation to cut rates in September could lead to a sharp retracement in the bond market. We must pay close attention to any change in tone from what we have heard so far. Create your live VT Markets account and start trading now.

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A U.S. options strategist has raised concerns about possible declines in equity markets over the next three months. This warning stems from current trends in the credit market. Right now, credit spreads are very narrow, meaning that corporate bond investors are settling for smaller additional yields compared to government bonds. Narrow credit spreads can indicate optimism, but this may not align with the current economic situation. Asset managers are wary and are reducing their investments in high-yield credit because of fears of slower growth and higher default rates. Historically, shifts in credit indicators, like CDX and iTraxx, often precede stock market volatility.

Credit Market Benchmarks

The ICE BofA U.S. High Yield and Corporate Option-Adjusted Spreads, which can be viewed on the Federal Reserve Economic Data site, serve as useful benchmarks. An increase in spreads usually signals a decrease in risk appetite and potential market stress. Investors are also keeping an eye on inflation reports that affect interest rate expectations, which, in turn, influence bond yields and spreads. It’s important to track credit spreads and inflation figures because discrepancies between stock prices and credit spreads can highlight market weaknesses. By observing movements in credit spreads and understanding indices like CDX and iTraxx, investors can identify early warning signs in credit markets and better evaluate risks in their investment portfolios. Credit markets are hinting at possible challenges for stocks in the near future, so it’s wise to stay alert. Corporate bond investors are currently accepting very low extra yields, indicating optimism that may not be warranted. This narrowness in credit spreads could make the market vulnerable if economic growth slows. At present, the ICE BofA high-yield spread is just 305 basis points, reminiscent of the complacency seen in late 2021 before the rate hikes of 2022. Meanwhile, the CDX Investment Grade index sits close to 50 basis points, while the S&P 500 exceeds 6,200. This disconnect—where credit markets are stretched thin but stock prices are high—often leads to significant corrections.

Strategies for Navigating Volatility

This situation warns derivative traders about potential volatility, especially since the VIX index is around a low of 13. Equity options seem to be undervaluing the risks signaled by the credit market. A similar trend happened before the downturn in early 2022 when credit spreads started widening weeks before a major drop in the equity market. The U.S. inflation report due tomorrow, August 12th, will be crucial to watch. If the number exceeds the expected 2.8% year-over-year, it could quickly widen spreads and likely increase equity volatility. Given this risk, now could be a good time to buy downside protection. Purchasing out-of-the-money put options on the SPX or QQQ with September or October expirations can effectively hedge a long portfolio. The current low volatility makes these options relatively inexpensive. Another option is to directly consider volatility through VIX derivatives. With market anxiety so low, buying VIX call options for the coming weeks may provide a cost-effective strategy for a sudden market shock. If credit spreads start to widen, the VIX would likely be the first to react. It’s essential to monitor key credit benchmarks, like the high-yield option-adjusted spread on FRED, every day. If equities rise after the inflation report but credit spreads do not tighten to support this move, that rally may be unstable. This would suggest it’s time to consider bearish call spreads. Create your live VT Markets account and start trading now.

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Eurostoxx futures rose 0.1% during early European trading. German DAX futures went up by 0.2%, while UK FTSE futures stayed the same.

European Equities Consolidation

European stocks are stabilizing after a strong recovery last week, despite a rough start on August 1. In the US, S&P 500 futures also climbed 0.1% as the week kicks off. The upcoming US CPI report, set to be released tomorrow, is expected to affect market sentiment. This week has started quietly, with traders waiting for a key inflation report. The small increase in Eurostoxx 50 and S&P 500 futures signals that investors are consolidating after the upswing that followed the downturn on August 1. Right now, all eyes are on the US CPI data being released tomorrow.

Significant Catalyst Horizon

The upcoming CPI report is the most important factor to watch. Economists predict July’s headline inflation will be around 3.2%, a slight decrease from the higher numbers seen earlier this year. If the number is much higher, it could pressure stock prices, increasing the chances that the Federal Reserve will keep its hawkish approach. Due to this uncertainty, traders should keep an eye on implied volatility for major index options. Looking back at early 2025, we noticed that the VIX index, which gauges S&P 500 volatility, shot up over 10% just hours after the March CPI was released. We can expect similar volatility spikes tomorrow, creating opportunities for those who are prepared. One possible strategy is to use options to capitalize on the expected price changes without betting on a particular direction. For instance, a long straddle on the SPY ETF or Eurostoxx 50 index could profit from a significant move, whether up or down, after the data release. This is a straightforward volatility strategy for the next few days. The US data will also directly affect European markets like the DAX and FTSE. The European Central Bank has kept its key interest rate at 3.75% for the last two quarters, indicating a focus on data trends. A high US inflation number might negatively impact sentiment in Europe, as it points to ongoing global inflation challenges. As a result, traders might think about purchasing inexpensive, out-of-the-money puts on the Eurostoxx 50 to protect against negative surprises from the US. These contracts provide an affordable way to safeguard a portfolio or speculate on a downturn. On the other hand, call options could be appealing if one expects the inflation data to be cooler than anticipated, potentially causing a relief rally. Create your live VT Markets account and start trading now.

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The week starting August 11 will kick off quietly, with no major data impacting the FX market on Monday. However, important announcements are expected on Tuesday, including Australia’s RBA monetary policy, labor statistics from the U.K., and U.S. inflation data. On Wednesday, Australia will report its wage price index, and Canada will provide a summary from the Bank of Canada. Thursday will feature Australia’s employment data and the U.S. Producer Price Index. On Friday, the U.S. will share information on retail sales, consumer sentiment, and inflation expectations.

RBA Policy Expectations

The Reserve Bank of Australia (RBA) is likely to reduce its cash rate by 25 basis points to 3.60%. Recent data shows inflation decreasing to 2.1% and slower job growth, with unemployment rising slightly to 4.3%. These trends, along with wage growth, will likely shape future policies. In the U.K., the average earnings index is expected to be at 4.7%, with a claimant count change of 20.8K, and unemployment remaining stable at 4.7%. Despite a drop in payroll employment, the Bank of England reports a steady labor market outlook. The U.S. core CPI is projected to rise by 0.3%, with headline CPI at 0.2%. Year-over-year CPI expectations are slightly higher at 2.8%. This data is key for evaluating potential Fed rate cuts, especially considering ongoing tariff effects on inflation. Previously, U.S. core CPI increased by 0.3%, bringing the yearly rate to 3.0%. Concerns about tariffs persist, leading to predictions of a possible 25 basis points Fed rate cut in September due to signs of weakness in the labor market.

Australia Employment Projections

In Australia, an employment change of 25.3K is expected, with a slight drop in unemployment to 4.2%. U.S. core retail sales month-over-month are forecasted at 0.3%, while total retail sales month-over-month are expected at 0.5%. Growth is anticipated to receive a boost from a projected 7% rise in auto sales. However, consumer trends show cautious spending, with a decrease in discretionary goods and services spending. Looking ahead from August 11, 2025, this week is important for central bank policies and inflation data. A calm start is expected today, but volatility may occur starting tomorrow with major releases from Australia, the U.K., and the U.S. This could lead to significant changes in the foreign exchange and interest rate markets. For Australia, we expect the RBA to lower its cash rate to 3.60% on Tuesday. This prediction is backed by the sharp drop in annual inflation to 2.1%, down from over 7% in late 2022. The rise in unemployment to 4.3% this year reinforces the case for easing policy. Given the likelihood of a rate cut, we should prepare for a weaker Australian dollar. Traders could consider buying put options on the AUD/USD pair to position for potential declines, especially if the RBA indicates further cuts. Any surprise decision to hold rates steady could lead to a sharp, albeit temporary, rally in the currency. In the U.S., Tuesday’s inflation data is crucial for guiding the Federal Reserve’s plans for a rate cut in September. After holding rates above 5% for nearly two years, the market is keen for signs of continued cooling. While headline inflation is expected to be modest, a strong core reading of 0.3% might delay expectations for a quick cut. This uncertainty around U.S. inflation suggests increased short-term volatility for the U.S. dollar. We might explore options strategies like straddles on major USD pairs or interest rate futures ahead of the announcement. This approach allows us to benefit from significant price swings in either direction without betting on the inflation report outcome. Next, we turn to the U.K., where we expect Tuesday’s labor report to indicate ongoing cooling, with wage growth forecast to drop to 4.7%. This decrease is significant compared to levels above 8% seen in 2023, giving the Bank of England more reasons to maintain its steady outlook. A weaker labor market indicates that past rate hikes are affecting the economy. This environment is generally bearish for the British pound. If the labor data meets or falls short of expectations, the currency may face further drops. We could prepare for this by considering short positions in GBP/USD or buying put options on the pound. With both the RBA and Bank of England adopting dovish stances, opportunities might arise in cross-currency pairs. If U.S. inflation data comes in higher than expected, a long USD/AUD or long USD/GBP trade could be appealing. This strategy allows us to take advantage of differing monetary policies between central banks. Finally, we will monitor U.S. retail sales on Friday to assess consumer health. While the headline figure is expected to be positive, this strength seems driven by a temporary rebound in auto sales. Excluding that factor, the underlying data points to a cautious consumer, supporting the view of a slowing economy. Create your live VT Markets account and start trading now.

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The US Consumer Price Index (CPI) report is the main highlight for markets this week. Recent weak economic data has led traders to think there might be a rate cut in September, as Federal Reserve officials are becoming more cautious. If inflation surpasses expectations, concerns may grow. The risk of stagflation is increasing, causing worry among market participants.

Inflation Expectations for July

Analysts expect a 0.2% monthly rise in headline inflation for July, down from 0.3% in June. However, the annual inflation rate is projected to rise to 2.8%, up from 2.7% previously. Core inflation is expected to rise by 0.3% monthly, compared to 0.2% in June. Year-over-year, core inflation is estimated to increase to 3.0%, up from 2.9%. Core inflation numbers are crucial, but the specifics of the report matter too. It’s important to watch if businesses pass on higher tariffs to consumers, as this could pose challenges for the Federal Reserve. Policymakers might reference past approaches, calling inflation “transitory” to justify potential rate cuts later in the year, arguing that tariffs could temporarily inflate prices. Still, if inflation persists, it will complicate the Federal Reserve’s choices and keep markets on edge as September approaches. With the important US CPI report coming this week, we anticipate a strong market reaction. Current pricing on CME Fed Funds futures indicates a 65% chance of a rate cut in September. This is influenced by recent weak data, including a Q2 GDP growth of just 0.9% and an increase in the unemployment rate to 4.2%.

Hot Inflation Risks

A surprise rise in inflation could derail hopes for a rate cut and raise concerns about stagflation. This uncertainty has already pushed the CBOE Volatility Index (VIX), a measure of market fear, from around 13 earlier this year to over 18. We are watching for any signs of a further increase. Expectations are for the annual inflation rate to reach 2.8%, with core inflation rising to 3.0%. A figure above these expectations would challenge the Federal Reserve’s recent dovish stance, indicating that price pressures may be returning even as economic growth slows. Given this uncertain outlook, strategies that benefit from significant price swings in either direction appear promising. For instance, options strangles on the S&P 500 or Nasdaq-100 indices could effectively capitalize on the volatility surrounding the CPI report. These trades can profit whether the market rises on a soft report or declines on a hotter one. We are also closely monitoring the interest rate derivatives market, especially options on Treasury note futures. A CPI report that exceeds expectations could lead to a spike in yields, undermining the narrative of an impending rate cut. Traders are preparing for this possible shock to bond prices. The Fed’s strategy of labeling inflation as “transitory” due to tariffs brings back uncomfortable memories. Back in 2021, the Fed used similar language as inflation surged to 40-year highs, which resulted in aggressive rate hikes in 2022 and 2023. Market tolerance for this narrative is likely low. Any hints in the CPI report that businesses are passing tariff costs onto consumers will be a significant warning sign. This type of inflation is challenging for the Fed to manage with monetary policy, placing policymakers in a tough spot ahead of their September meeting. Create your live VT Markets account and start trading now.

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Cryptocurrencies have made a strong comeback in August after a slow down in July. The news that private assets can now be included in 401(k) plans has boosted interest. Bitcoin has risen above $120,000, and Ethereum has surpassed $4,000. For Ethereum, hitting $4,000 is a significant achievement since it had previously been a barrier for its price. This recent rise indicates even more potential for price gains. The focus has shifted to how high prices might go, rather than if they can reach old highs. This summer is different than usual, as there has been heavy buying of risky assets, against the typical trend of less activity during this time. This year has turned the summer into one full of crypto and collectible excitement. Ethereum staying above $4,000 shows a strong upward trend. Traders in derivatives might want to keep or start long positions in futures contracts to take advantage of this momentum. The news about 401(k) plans gives a solid reason for the recent activity, suggesting new investment flows that we haven’t seen before. As buying spikes, implied volatility is rising, making call options more expensive. The Crypto Volatility Index (CVI) has gone above 90, a level that usually indicates excitement but also high costs. A smarter approach could be selling cash-secured puts or using bull put spreads to benefit from these high premiums while staying optimistic. This surge isn’t just retail investor enthusiasm; institutions are heavily involved too, confirming the trend. Open interest in CME Bitcoin futures recently broke a record of $25 billion. This level of large player involvement suggests they expect prices to go up in the coming weeks and months. The options market suggests a big upward move is coming, with a strong emphasis on gains. The 25-delta skew for Bitcoin and Ethereum options is highly positive, meaning traders are paying a lot more for call options compared to puts. This shows a widespread belief that the market is likely to rise. We saw something similar back in late 2020 when institutional news started moving the market, leading to a huge rally in 2021. While trends can be beneficial, it’s smart to use trailing stops on futures positions to safeguard profits. Taking some profits from long call positions can also help manage risk if the market changes quickly.

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