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Analyst: Bitcoin Options Long-Short Setup Diverges, Funding Flows Indicate Cautious Sentiment

2 hours ago

On December 18, Derive founder Nick Forster told *The Block* that traders have shifted sharply toward defensive structural positioning. Bitcoin’s 30-day implied volatility has climbed to nearly 45%, while skew remains around -5%—and longer-term skew is anchored at that level through Q1 and Q2 of next year. Ahead of the upcoming expiry, market positions show clear polarization: call option open interest is still building at $100,000 and $120,000 strike prices, indicating some traders are still betting on a potential sharp Bitcoin rebound. However, overall fund flows signal heightened caution. Forster noted shorts are building a "significant amount of put option exposure" near the $85,000 strike to hedge against a short-term Bitcoin drop below this key level. He added that option-implied probabilities still reflect a challenging market: the market assigns Bitcoin only ~30% odds of hitting $100,000 and ~10% odds of reclaiming its all-time high.
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CZ: Believes there is a certain paradox in AI trading agents, but is confident that AI will be widely adopted by traders

On December 18, Binance founder Changpeng Zhao (CZ) shared his thoughts on AI’s role in trading during an end-of-year Q&A session: “AI will become widely adopted in trading, but I see multiple potential development paths—ones that differ somewhat from prediction markets. Nearly all seasoned traders, large trading firms, and hedge funds have dedicated trading teams, and I suspect many are already using some form of AI, even unknowingly (for example, in data analysis). Serious players will either train their own AI algorithms or at least test AI trading platforms. AI trading platforms face a potential contradiction: If you have an AI algorithm that generates significant profits, why sell it as a service? Why not trade with it yourself? The only plausible reason might be a lack of capital—but today, fundraising is relatively easy for strong teams, especially those with a genuinely profitable AI. Selling AI as a monthly subscription implies the service is more profitable than t

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Singapore's DBS Bank has once again received 3000 ETH from GSR, approximately $8.48 million.

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Bitcoin Surges Above $89,000

December 18 — Per HTX market data, Bitcoin has rebounded above $89,000, currently trading at $89,012, with a 1.6% gain over the past 24 hours.

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CZ: It is expected that in the future AI and robots will extensively utilize cryptocurrency, they have no other choice

On December 18, Binance founder CZ said during a year-end Q&A event: “I expect AI and robots will widely adopt cryptocurrency down the line. It’s not happening now, but it will eventually—they have no other option. They can’t use traditional fiat, open a bank account, complete KYC checks, take selfies, or swipe a card; these systems aren’t built for smart entities. So I think ‘deep payments’ could focus more on the physical interaction layer with robots, and that’s going to be a major space. But when it comes to my personal interactions, there hasn’t been much talk about this yet.”

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The US Core CPI unexpectedly slowed to its lowest level since 2021.

**December 18 – U.S. inflation rose year-over-year in November but at its slowest pace since early 2021, with core CPI (excluding volatile food and energy) hitting 2.6% and overall CPI at 2.7%, according to Labor Department data.** **The core measure was down from 3% two months prior, the Bureau of Labor Statistics (BLS) reported Thursday. However, the federal government shutdown limited BLS’s ability to collect most October price data, restricting its analysis of November’s comprehensive inflation indicators and month-over-month changes in key categories.**

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Federal Reserve Rate Futures imply that the market expects a further 3 basis points of policy easing by the end of 2026.

Dec. 18 — The Fed rate outlook indicates the market is pricing in an additional 3 basis points of policy easing by the end of 2026. (FX168)

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