By Frank, PANews

On September 17th, the Federal Reserve unexpectedly pressed the button on interest rates, lowering the key rate by 25 basis points. For risky assets like cryptocurrencies, this rate cut appears to pave the way for a bull market. However, can this macroeconomic positive momentum translate into market momentum? With the opening of the liquidity valve, will the crypto market's next destination be a vast expanse of horizons, or a precipice of overleveraged leverage? To answer this question, we need to delve into the market's fabric, exploring options, futures, capital flows, and even the micro-level manifestations within the market.

PANews will conduct a multi-dimensional data analysis of the macro data of the crypto market and data from recent typical cycles, attempting to outline the true picture of the market at the time of the interest rate cut.

Options data: Bullish sentiment is evident, with $110,000 being the biggest pain point

Let's first look at options data. Coinglass data shows that the current options/contract open interest ratio (ratio of options contracts to total options + futures contracts) for Bitcoin is approximately 68.63%, while for ETH it's approximately 28.81%. This data suggests that options currently account for a larger proportion of the Bitcoin market, making Bitcoin options data more reflective of market realities. However, ETH, with its lower ratio, requires less reference to options data.

Options data shows that as prices rise, BTC options open interest continues to grow, reaching a record high of $60 billion. September 26th will be the most important expiration date in the near term, with the highest call and put option expiration amounts on this day, far exceeding any other date. The other major expiration date is December 26th, the quarterly expiration date.

The distribution of call options expiring on September 26th shows a total value of $331 million, while the total value of put options is only $29.57 million, which is about 10 times that of the latter. This shows that there is a large amount of funds in the market betting that the price will rise when the September 26th expiration date comes.

However, it is important to note that this one-sided market structure is also very fragile. If the market fails to rise as expected, or even falls, these huge call options will quickly depreciate in value, potentially causing a stampede of long positions to close, triggering a sharp reverse fluctuation.

In terms of strike prices, the most popular short-term bullish call option bets are between $120,000 and $150,000, while the main bearish bets are between $110,000 and $95,000. This suggests that $120,000 to $150,000 is the primary target for bullish activity, while $95,000 to $110,000 is considered support by the market. The biggest recent pain point is $110,000, so $110,000 may be the primary target for sellers, and prices may fluctuate around this range around the September 26 delivery date.

Overall, BTC options data suggests that short-term market optimism remains strong, with bulls betting on a price rise above $120,000. Short sellers appear to be placing hedging orders, viewing $95,000 as a key support level. For option sellers, maintaining the price at $110,000 on September 26th would maximize profits, leading to a potential price war between the two sides.

Futures positions are at all-time highs, and high leverage creates volatility risks.

Looking at futures data, open interest in contracts for BTC, ETH, and SOL is at all-time highs. In particular, current open interest for ETH and SOL has reached peaks compared to the previous cycle's highs. For SOL, for example, when the price reached around $250 in 2021, total open interest on exchanges was approximately $850 million. In this cycle, while the current price has fallen short of last year's all-time high, open interest has reached $17 billion, representing not only 21 times the 2021 figure but also approximately double the 2024 all-time high of $8.78 billion.

ETH's contract holdings also show a similar effect.

The above data demonstrates that, unlike the first phase of the rally, this wave of gains is clearly driven by a significant amount of leveraged capital. This indicates that speculation in the futures market is extremely intense, with a significant amount of capital entering the market through futures contracts. While the upward momentum appears strong, it is crucial to be fully prepared for a potential sharp pullback and implement risk control measures. This chart pattern is typical of the late or peak phase of a bull market, and market volatility is expected to increase significantly.

Over the past 30 days, the vast majority of cryptocurrencies on major exchanges have positive funding rates, many at remarkably high levels (e.g., exceeding 0.1%). Some small-cap or popular altcoins, such as HYPE, have seen funding rates reach an astonishing 6.8%. This suggests that in the current bull market, speculative capital is tending to flow into altcoins with greater volatility and potential for growth. The altcoin market is already extremely crowded with long positions, creating a more pronounced speculative bubble.

Capital Flow: Funds are still in a net inflow state, but are showing signs of fatigue

Next, we analyze the market from the perspective of capital inflow. Currently, the inflow of funds from traditional financial markets into the crypto space is mainly from US spot ETFs and DAT companies.

ETF data shows that BTC and ETH have experienced net inflows over the past month. BTC saw a net inflow of approximately $3.25 billion in September, a significant rebound from the net outflow of $750 million in August. ETH, on the other hand, has seen net inflows for nearly six months since April, with July and August seeing the largest net inflows of $5.4 billion and $3.87 billion, respectively. As of September 19th, net inflows in September were approximately $359 million. While still inflows, the potential has clearly decreased.

Data from DAT companies shows a significant increase in cryptocurrency trading volume among listed companies following the Federal Reserve's 25 basis point interest rate cut on September 17th, rising from $7.6 billion the previous day to $11.6 billion. Regarding holdings, the growth rate of DAT companies' BTC holdings has slowed significantly since September, with mainstream altcoins like ETH and SOL becoming the primary source of DAT companies' increased holdings. So far in September, DAT holdings have increased by approximately $5.24 billion. This compares to approximately $8.99 billion in August and $13.6 billion in July. Structurally, July saw a significant increase in BTC, followed by ETH in August and SOL in September. However, overall, this momentum is showing signs of weakening. While many listed companies have announced increased cryptocurrency holdings, their volume is clearly smaller than that of companies that previously used BTC as a treasury.

Regarding stablecoins, the total market capitalization has exceeded $291.8 billion, and overall growth momentum remains significant. Over the past month, USDT has grown by approximately 2.47%, USDC by approximately 9.68%, and USDDe by 20.78%. USD1 has also seen significant growth, reaching 20%.

From the perspective of capital inflows, while the market has continued to experience net inflows over the past month, the growth momentum has clearly declined. Combined with the high leverage sentiment mentioned above, it seems the market has entered a phase of weak growth and excessive bubbles in the short term.

Short-term comparison: The rise has slowed down, and 70% of tokens have fallen in the past month.

Finally, let's examine the market's micro-performance. PANews analyzed the rise and fall of 418 spot trading pairs on Binance. The analysis period compared the previous altcoin rally from June 22nd to July 23rd with the most recent uptrend from August 3rd to August 23rd.

Using ETH as the benchmark for altcoin season, ETH's price rose by 58% between June 22nd and July 23rd, compared to an average of 37.2% for all tokens. Of these, 44 tokens, representing approximately 10%, saw gains exceeding ETH's. During this period, 384 tokens, representing 91.86%, ultimately saw gains. Thirteen of these tokens saw gains exceeding 100%.

Between August 3rd and August 23rd, ETH ultimately rose by 41.06%, while the average gain for all tokens was approximately 16.87%. Twenty-three tokens saw gains exceeding those of ETH, and five saw gains exceeding 100%. The total number of tokens that saw gains was 367%, representing 87% of all tokens.

This data shows that the overall growth rate during the recent uptrend has significantly declined compared to the upward momentum seen in July. Data from August 23rd to September 18th shows that nearly 70% of tokens have declined. Ethereum, the leading altcoin, also fell 5% during this period, indicating that the market has entered a clear period of consolidation.

In short, the current crypto market is experiencing a bifurcated state. On the one hand, prices are being propped up to high levels by record-breaking leverage in the derivatives market and extremely optimistic speculative sentiment. On the other hand, underlying real capital inflows (such as ETFs and institutional buying) are showing signs of weakening, while the breadth of market gains is also narrowing.

This market, driven by frenzy rather than solid capital, has created an extremely unstable market structure, one that is precarious . The upcoming quarterly settlement date of September 26th may become the ultimate showdown between bulls and bears over key price levels (such as Bitcoin's biggest pain point of $110,000). At that time, the market's leverage-driven frenzy is likely to face a severe test of its direction.