QCP: Tonight's CPI may be the catalyst that triggers a sharp drop in DXY, and it is relatively cheap to buy put options in the crypto market now

Here is the English translation: The crypto news outlet Mars Finance reported on February 12 that "Utterly boring! This is the current state of the market over the past two weeks." Despite the ongoing tariff actions between the US, Canada, and Mexico, as well as against China, the traditional financial (TradFi) market has not found a clear direction. On multiple indicators, there are no signs of panic on Wall Street. The VIX index seems to be fixed at 16, indicating that market participants have already bought protection measures for further negative news. Powell's testimony in the Senate reiterated the Federal Reserve's "wait-and-see" stance, hinting that the pace of rate cuts in 2025 may be slower. Despite this hawkish stance, the US dollar index (DXY) has failed to rise. Based on CFTC data, the market is inferred to be holding a large long position in the US dollar. Interest rate differentials also indicate that the US dollar is overvalued relative to other currencies, which may explain why the DXY has struggled to gain momentum. Given that negative news may have been digested by the market, we believe the US dollar now faces greater downside risks. Any positive news could force a large-scale unwinding of US dollar long positions, potentially driving a rally in risk assets. The CPI release tonight could be a catalyst for a significant DXY decline. However, this rising tide may not lift all boats. continues to underperform stocks and gold, indicating some hesitation within the crypto community. Liquidity remains thin amid the many new listings each week, and last week's massive liquidations have caused heavy losses for many traders. For participants still holding crypto long positions, tracking institutional fund flows and buying downside protection may be the best strategy at the moment, especially as buying put options is relatively cheap now.