Key Indicators: (March 10, 4 PM → March 17, 4 PM Hong Kong Time)

  • BTC against USD increased by 1.5% ($82,300 → $83,500), ETH against USD decreased by 8.2% ($2,070 → $1,900)

BTC to USD Spot Technical Indicators Overview

  • The spot price of Bitcoin continued to decline over the past week, but as the price stabilized within the $80,000–$85,000 range, we finally saw actual volatility begin to decrease. Notably, the price hit a recent low last week, and the market has been closely watching price movements in the following days, trying to guess whether the next major volatility will be upward or downward. Considering we have experienced a prolonged period of high volatility, we believe the price will undergo some adjustments and stabilize, expecting support levels around $78,000–$80,000 in the coming week, with recent resistance at $85,000–$86,000, and further up at $89,500–$92,000.

  • If the price falls below $78,000–$80,000, the market may return to a high volatility range. Conversely, if it breaks above $92,000, we will start testing the more significant long-term resistance at $98,000–$100,000. We are optimistic about Bitcoin's mid-term trend but are still waiting for more signs to confirm the end of the correction cycle.

Market Themes

  • It was another week of significant volatility. The S&P 500 index hit a new low due to ongoing long-short balance in stock funds and deleveraging. Rumors suggest that many assets experienced substantial pullbacks, but there was nothing fresh on the narrative level to support this news. The market has begun to feel numb to the back-and-forth tariff policies; ultimately, this was just a correction that should have happened long ago and a deleveraging, which the market has optimistically ignored for many years. Structurally, volatility has gradually emerged in this cycle, and the VIX (Volatility Index) is unlikely to remain in the teens over the next few months. Of course, there will also be periods of calm and stability in between.

  • As for cryptocurrencies, Bitcoin fell below $80,000 multiple times last week, and the market continued to clear excess positions. Meanwhile, Ethereum broke below the critical support of $2,000 and has since failed to regain upward momentum. Throughout the week, Bitcoin's price performed better than the S&P 500 and Nasdaq indices, but it still felt heavy during the New York session, before rebounding during the Asian session. Overall, positions across various markets are cleaner now, and we believe that the high correlation across assets will not continue. Bitcoin is only likely to hit new lows after a substantial decline in the S&P index.

BTC Implied Volatility

  • On Monday, the decline in the S&P index during the New York session led to a spike in implied volatility in the U.S. stock market, while also raising Bitcoin's implied volatility, which significantly decreased later in the week. Actual volatility also gradually decreased this week, with weekly actual volatility dropping to just over 40 points for the first time in recent weeks, falling below 50 points. The decrease in implied volatility was more pronounced in short-term expiration dates, while it slightly decreased at the far end of the curve. There was selling pressure at the end of June as medium-term players cleared structural long positions.

  • From the current situation, we expect the market to continue stabilizing while waiting for new catalysts, so actual volatility will remain relatively steady. The expiration date of April 4 will attract more attention, as Trump will announce the next round of tariff measures on April 2, and a relatively high premium has already been established on the volatility surface of U.S. stock indices and foreign exchange.

BTC Skew/Kurtosis

  • This week, the skew on short-term expiration dates has recovered from a severe downward bias. Because the market's lower positions were very clean after the settlement from Sunday to Monday, there won't be too many positions triggering a liquidation during the next price pullback. At the far end of the term structure, the skew prices remain relatively stable, as structurally, medium to long-term players are not interested in the downside of the price.

  • The kurtosis ended the week essentially unchanged. However, it fluctuated significantly during the week due to changes in implied volatility. Although we believe holding long skew is still good, in the short term, due to the price fluctuating within a limited range, long skew may lose out on Theta. Therefore, we have a stronger belief in holding long skew at the far end of the curve, seeking a narrative shift as the price breaks the $70,000–$105,000 range after the election.

Wishing everyone good luck this week!