Key Indicators: (March 3, 4 PM -> March 10, 4 PM Hong Kong Time)

  • BTC against USD fell by 10.7% ($92,200 -> $82,300), ETH against USD fell by 14.8% ($2,430 -> $2,070)

Overview of BTC to USD Spot Technical Indicators

  • Due to a series of news and last week's cryptocurrency-related events, market volatility remains high. Ultimately, prices failed to stabilize and continued to swing widely, with downward support at $79,000-$73,000 while upward resistance is at $89,000-$93,000.

  • We initially hoped that last week's bottoming and rapid rebound indicated that the long correction period had ended, but price movements have been disappointing. The initial resistance levels above the starting drop include $95,000-$96,000, followed by $100,000-$102,000, and finally $110,000. If prices fall below $73,000, it may retract to $65,000-$67,500, after which price movements will be more complex than the overall rise currently expected. We still maintain a mid-term bullish outlook, but in the absence of strong upward momentum, the timeline may be extended further.

Market Themes

  • The reintroduction of U.S. tariffs has reignited fears of a global trade war, with the VIX index rising from 20 to 26 points. At the same time, defense spending in Europe and Germany triggered a sell-off of German government bonds, which spread to Japanese bonds, UK bonds, and U.S. Treasuries, further complicating the overall risk market. It appears that the Trump administration is very eager to lower long-term interest rates and refinancing costs to alleviate economic conditions, although achieving this goal may lead to further sell-offs and capital outflows from U.S. risk assets. Non-farm data appears slightly weak, and this trend may continue under the pressure of DOGE (Department of Government Efficiency).

  • Returning to cryptocurrencies, the price rebound caused by Trump's tweet was merely a flash in the pan. Pressure from U.S. stocks triggered a sharp reversal in prices from $95,000 a week ago down to $81,000-$82,000. Subsequently, with U.S. stocks climbing from the bottom and the optimism from Friday's cryptocurrency summit, prices found support. On Thursday night, Trump signed an executive order announcing the use of held Bitcoin for cryptocurrency reserves. Although this news suggests no further buying, which is disappointing, it is still a step in the right direction for Bitcoin (no mention of other tokens). After market sentiment recovered on Friday night, prices briefly touched the resistance level of $90,000-$91,000 but continued to probe downward after the summit, which had no new information. In the low liquidity period on Sunday night, Bitcoin was sold below $80,000, Ethereum fell below $2,000, and Solana dropped below $125.

BTC Implied Volatility

  • Despite the severe fluctuations in implied volatility during the week, it ultimately remained relatively unchanged week over week. The implied volatility squeeze before the cryptocurrency summit elevated prices, with overnight volatility pricing at one point reaching a 5% fluctuation. Extremely high actual volatility also supported the increase in implied volatility before the summit. However, after the meeting, which had no new information and a very restrained price movement, the implied volatility became oversold, briefly selling to 47 for the implied volatility expiring on March 14, and then sharply rebounding after the price was sold off on Sunday.

  • Actual volatility remains at levels between 50 and 60, at a recent high, as the market still seeks balance within a new range. Although we expect the market to continue to fluctuate locally in the coming days, considering the cleaner positions in the current market, we believe that actual volatility will return to mid-40 levels later this week.

BTC Skew/Kurtosis

  • The skew is biased downward for short-term expiration dates. This is because, compared to rising prices, the downward movement from high levels is more aggressive (except for the time Trump tweeted). On the longer-term curve, the skew started to shift upward from April to May, as the market is structurally unwilling to deploy positions below the price.

  • Although the kurtosis ended the week relatively unchanged, the fluctuations during the week were quite severe and highly correlated with price changes. However, as prices remained locally volatile and players mostly used call or put spread options to configure directional positions, the weight on the wings of the smile curve was pulled down, causing kurtosis to decline in the short term. Still, we recommend holding the wings for protection.