Analysis: Signals in the crypto options market reinforce a cautious stance; $75,000 is a key turning point for Bitcoin

PANews February 4 News, Singapore-based crypto investment firm QCP Capital analyzed that the crypto market remains volatile, with Bitcoin dropping to around $72,900, hitting the lowest point since the US election rally. It then rebounded after the US House of Representatives passed a $1.2 trillion funding bill to end the partial government shutdown. On the macro front, the shutdown risk has been temporarily alleviated, but the Department of Homeland Security’s funding has only been extended to February 13, with the risk of a new deadline still present. Additionally, after the US shot down an Iranian drone near an aircraft carrier in the Arabian Sea, oil prices regained geopolitical premiums, but diplomatic news limited the gains. The nomination of the Federal Reserve Chair has reignited policy response risks; if the market begins to price in larger rate cuts this year, it could marginally support risk assets and weaken the dollar. However, investors are also watching the pace of balance sheet reduction; shortages of reserves in key areas could trigger market stress.

Signals from the options market reinforce a cautious stance. Although spot prices have rebounded, front-end implied volatility remains high, with at-the-money options volatility still elevated, and the term structure trending toward slight inversion, indicating the market is still paying a premium for near-term jump risks. The put skew has steepened sharply, and butterfly spreads remain expensive, showing concentrated demand for downside convexity. From a tactical perspective, $75,000 is a key turning point. If the price can stabilize at this level and funding rates normalize as positions are rebuilt, this level seems to be a reasonable point to increase risk exposure. Once broken below, market sentiment could quickly shift to defensive.