Key Technical Indicators: (February 10, 4 PM - February 17, 4 PM Hong Kong Time)

  • BTC down 1.4% against USD ($97,500 → $96,150), ETH up 1.9% against USD ($2,640 → $2,690)

Spot Technical Indicators Overview:

The market has been very quiet this week, trading within a narrow channel (which was derived from the initial wedge pattern). Support is firmly held below $95,750, extending down to $94,000–$95,000; meanwhile, selling continues to be observed above $98,000. Considering the strong support below, we still believe that the price will move out of the current range in the next few trading days. However, as actual volatility continues to decline, implied volatility may take some time to move to the 40s. Current resistance is between $98,000–$99,000, with stronger resistance appearing above $100,000; if the $94,000–$95,700 level is broken, stronger support will emerge at $89,000–$91,000.

In the medium term, we remain optimistic about Bitcoin, expecting it to trade within the range of $120,000–$130,000. However, the expected timing has been delayed until later this year.

Market Themes

  • Overall, the macro market has been relatively calm this week, despite CPI and PPI slightly exceeding expectations. The market seems to have found a balance regarding the Fed's rate cut/increase actions. Sensitivity to news regarding Trump's tariffs is also gradually decreasing (the market reacted mildly to this week's 'reciprocal tariffs' news).

  • Cryptocurrency performance has been lackluster again, with Bitcoin remaining solidly within the range of $94,000–$99,000. Following the release of a strong CPI index, price movements rebounded from the bottom of the range, indicating strong support, but quickly retreated after a surge to $98,000. Ethereum also continues to hold within the range of $2,550–$2,850, but with greater local fluctuations. Other altcoins are mixed, with SOL being heavily sold before the supply lock-in at the beginning of March.

  • Cryptocurrency expert Sachs brought optimism to the market on Friday, claiming that very positive developments are imminent for cryptocurrencies. The preliminary deadline for the initial terms of the cryptocurrency working group is this Friday, the 22nd, so we expect to see market stirrings regarding some news or rumors later this week. However, overall, the market seems unwilling to chase higher until more tangible catalysts appear.

BTC ATM Implied Volatility

  • This week's implied volatility level has slightly decreased and gradually found support during the sideways movement, as its absolute level is visibly lower compared to before. However, this masks the fact that the term structure is quite steep. As lower volatility trading days gradually expire, the longer-term expiration dates should be gradually raised. In fact, they have not been raised (sideways or down), indicating that the volatility for further dates is gradually declining. Combined with the recent lower actual volatility, it indicates that the cost of holding long positions in the longer term is quite high.

  • If the cryptocurrency price continues to maintain within the range of $94,000–$100,000, we expect the ATM implied volatility to continue to decline. Coupled with a relatively steep term structure, we believe the optimal trading strategy is to hold short positions expiring in March locally. Meanwhile, holding out-of-the-money long protection can provide ample protection when the price breaks out.

BTC Skew/Kurtosis

  • As multiple attempts to breach the strong support level of $94,000–$95,000 have failed, the skew has gradually shifted upwards this week. This is also due to the market being cautious about holding shorts outside this range, considering the current low implied volatility levels and the potential for actual and implied volatility to rise rapidly after a breakout on either side.

  • Kurtosis has been quite silent this week in the short-term range. The continuously contracting price volatility confirms that the market has low demand for strike prices between $95,000–$100,000, while the low volatility level makes holding shorts outside this range very cautious.

Wishing everyone good luck in trading this week/month!