Key inflation data, Nvidia earnings, and shifting sentiment in crypto—Bitcoin consolidates while Solana faces volatility from memecoin mania and upcoming unlocks. Read on for insights!
Tuesday 9:00a - S&P Case-Shiller Home Price Index
Thursday 8:30a - GDP (2nd Read)
Friday 8:30a - PCE (Inflation Gauge)
*Various Fed Speakers Tues, Wed,Thurs, Friday*
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Disclaimer: Nothing here is trading advice or solicitation. This is for educational purposes only.
Authors have holdings in BTC, ETH, and Lyra and may change their holdings anytime.
This Friday, we have the PCE release, expected to come in around +2.6% YoY (Core).
The Federal Reserve prefers this inflation gauge because it captures a broad range of expenditures and adjusts for changes in consumer behavior.
+2.6% would show cooling inflation, offsetting the bad CPI print of +3.3% YoY Core released on 2/12/2025.
There are various Fed speakers throughout the week as well.
Chart: Finviz.com (US Equities) Friday 2/21
Finviz.com (US Equities) Friday 2/21
Last week, the market had a bearish Friday close as the consumer sentiment came in weaker than expected 64.7 (67.8 expected).
This spiked VIX higher, although the VIX futures term structure remains in Contango and the 10-day SPX RV is low around 16%.
We also have NVDIA earnings on Wednesday Feb 26th, after market close. This will be another important data point for the week.
German elections also concluded over the weekend, which were in-line with poll expectations. Likely a catalyst for lower vol.
BTC: $95,820 (-1.2% / 7-day)
ETH :$2,822 (+5.0% / 7-day)
SOL :$168.48 (-11.3% / 7-day)
I continue to stick to my BTC short-vol / price consolidation theme. Week-over-week, bitcoin prices merely moved -1.2%, well within the ~6% weekly standard deviation priced by the option market.
We can see that the Bybit hack didn’t have much of an impact on Bitcoin IV, despite the price drop from $99k → $95k (again validating the current consolidation range).
Looking at the BTC DVOL chart (above) it’s also clear that volatility had peaked with the Jan 20th US presidential inauguration. A fundamental insight worth keeping in mind.
Moving away from Bitcoin, Solana is worth mentioning this week.
The Solana ecosystem has been the major contributor to memecoin mania. With SOL/BTC prices also peaking during the US presidential inauguration which included of launch of $TRUMP.
Pump.fun has enabled anyone to easily launch a memecoin, which has also lead to a frothy environment as memecoins are now unlimited and SOL holders sell in order to buy memecoins.
Last week was the first week where Deribit option volume on Solana had a large participation from block-trade volume, as opposed to only on-screen trading.
That said, nearly 80% of the block-trade volume was concentrated in put contracts. Compared to only 40% puts for BTC and 37.5% Put for ETH during the same timeframe.
There as been a slight dip in stablecoin value on Solana recently, although this pales in comparison to the inauguration stablecoin inflow.
The other big headwind for the price of SOL is the FTX bankruptcy distributions and the 3/1/2025 SOL vesting unlock. There is about $2B of SOL value being distributed to creditors who might instantly sell.
These head-winds have been a drag on SOL, but there is likely some opportunity as the market might have already priced it all in.
Chart: Deribit SOL GEX
Dealers are long gamma around $160 (current prices) and become short gamma exposure around $200.
We can see the RR-Skew is also below 0-line, meaning puts are currently rich vs calls.
There’s an argument to be made that a relief rally in SOL prices could bring positive spot/vol correlation, as the market is potentially overly crowded to the downside.
Chart: SOLANA IV vs RV
Solana IV around 80% seems fairly priced to me.
I’d rather own SOL IV over BTC IV, if I had to chose.
TL:DR
BTC consolidation continues. SOL relative vol could be interesting vs BTC.
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