Key Indicators: (June 30, 4 PM -> July 7, 4 PM Hong Kong Time)

  • BTC rose 1.1% against USD (from $107.6k to $108.8k), ETH rose 4% against USD (from $2,480 to $2,580)

  • The price continues to hover below the historical peak, encountering strong resistance each time it attempts to break through. We expect the market to break through the historical peak in the coming weeks, but there is still some risk of falling back below $100k. If we fail to break through, we may see prices continuously correct down to $93k-$94k, but this still does not affect our long-term bullish view. If we successfully break through $113k, we could rapidly rise to $120k, and eventually to $125k-$135k.

Market Themes

  • Under the full swing of U.S. holidays and summer vacations, we have had another calm week. U.S. non-farm data was unexpectedly strong again, dispelling hopes for an early rate cut in July and diminishing the possibility of increased market risk appetite over the summer. Concerns about the July 9 tariff deadline led to a brief pullback in risk assets in the low liquidity environment before the weekend, but overall the market feels that the overall positioning and leverage are not heavy.

  • The cryptocurrency market saw a return of risk sentiment early last week. Bitcoin briefly touched above $110k but ultimately stalled before the historical peak. As U.S. economic data shattered expectations for an early rate cut, Bitcoin fell along with the U.S. stock market, and concerns over tariff policies caused the price to retrace to $108k. Locally, the correlation between Bitcoin and U.S. stocks/other risk assets remains high, but it feels like the market is still waiting for a real catalyst to drive prices up to new historical highs - the U.S. Congress has pre-announced that July 14 will start 'Cryptocurrency Week', during which cryptocurrency-related bills (mainly involving stablecoins) will be promoted. Perhaps this will trigger the market to gain enough momentum to break through the peak.

BTC ATM implied volatility

  • Last week's actual volatility was quite low, marking another week below 30 points (including the weekend, when the actual volatility was almost 0). The price remains comfortably within the range of $105k to $115k, and recent catalysts are almost non-existent. However, such low implied volatility is now beginning to attract buyers to purchase low-priced options (buying below to protect long spot positions, or buying call spreads above to amplify bullish leverage in preparation for a final breakthrough) - these trades are currently providing strong support for the bottom of implied volatility.

  • The current term structure is not steep (compared to historical levels), and the market has fully harvested the remaining term premium. Given the characteristics of Bitcoin, it is easy to return to a high volatility range when the price breaks through, having long Vega on longer terms and selling short terms as funding (the short-term curve is steep and rapidly declines over terms) looks like a very attractive position.

BTC skew/kurtosis

  • Skew moved sharply downward before the weekend as the market worried that Trump's tariff news would bring additional negative impacts, while the failure to break above $110k led to a wave of downward spikes. The demand for hedging downside risks in the market, combined with very low volatility, caused the skew to tilt downwards. With no further declines over the weekend, the skew quickly recovered. At the same time, demand in the far term market is only above the current price, so the forward skew is more stable.

  • Last week, the peak increased as local implied volatility continued to decline, while the market began to buy out-of-range price points to capture opportunities for price breakthroughs. However, the peak at the far end of the term remains at a low level, and there are still opportunities to buy peaks in preparation for price breakthroughs and for volatility patterns to return to high levels.

Wishing everyone good luck this week!