Key Indicators (March 17 4 PM - March 24 4 PM Hong Kong Time)

  • BTC against USD rose by 4.1% (83,500 -> 86,900 thousand dollars), ETH against USD rose by 8.9% (1,900 -> 2,070)

Overview of BTC to USD Spot Technical Indicators

  • As the currency price has been quite stable within the range of 81.5-87.5 thousand dollars, last week BTC's actual volatility finally began to decline. On March 24, the market appeared to be testing the trend resistance line of the decline since the late February peak. If it crosses above 87.5-88 thousand dollars, the currency price will retest the resistance level of 91 thousand dollars, and further up, 93 thousand dollars will be a resistance point; if it continues to break through, the market will have enough momentum to test the more critical resistance level of 100 thousand dollars.

  • If the opposite currency price falls, the market will encounter strong support at 80 thousand dollars, then extend to 77 thousand dollars, and receive small buy support during the pullback process. After breaking through the key support at 73.5 thousand dollars, we will face greater correction space. Once it falls down to 60-65 thousand dollars, our current viewpoint will no longer hold, indicating a more complex and long-term market turmoil. In the medium term, we continue to be bullish on the currency price, expecting it to rise to 115-125 thousand dollars in the coming months or quarters.

Market Theme

  • The market has been quite calm over the past week. Powell's speech at the FOMC meeting on Wednesday eliminated the possibility of hawkishness, and the VIX index ultimately fell below the psychological barrier of 20, ending the week at 19 (down from a high of 29 two weeks ago), once again avoiding a government shutdown. Risk assets rose further over the weekend as tariff news on April 2 revealed that more targeted measures may be taken. Although Trump's actions on this issue are very unpredictable, the current panic and pessimism surrounding tariff policy have already been priced into risk assets, so the market's reaction to tariff news in the short term is likely to be asymmetric (i.e., the response to good news will be greater than the ongoing bad news).

  • Returning to cryptocurrencies, the market became excited again last Friday upon learning that Trump would deliver an unplanned speech at the New York Digital Asset Summit, only to find out it was just a pre-recorded five-minute video. After briefly surging to 87 thousand dollars, the price pulled back to 83 thousand dollars over the weekend due to signs of risk asset decline, but then rebounded back above 87 thousand dollars due to favorable tariff news. ETH also successfully broke through bearish resistance, continuing to show a more sustainable rise after breaking 2 thousand dollars on Thursday.

BTC Implied Volatility

  • With the currency price finding balance in the range of 81.5-87.5 thousand dollars, the actual volatility entered a period of silence, gradually lowering the implied volatility over the past week. Even with the FOMC and Trump's speech at the DAS conference, the weekly high-frequency actual volatility dropped to 40 points, nearly the lowest since February. Overall, our view is that BTC's actual volatility will gradually decrease to the range of 30-40, but due to the significant fluctuations in actual price volatility, there is still a possibility of occasional spikes to 50-60 points.

  • The implied volatility curve's term structure has steepened sharply due to a decline at the front end, while also lowering the implied volatility at the far end until the end of September. The market appears to be removing the premiums associated with policy volatility, as the short-term narrative gradually becomes stale, and Trump has shown no particular concern for Bitcoin prices. Additionally, since BTC has still held above the 80 thousand dollar mark despite the S&P index performing poorly, the implied volatility market has gradually eliminated considerations of US stock beta volatility, as the actual correlation between the two is gradually weakening, and the VIX index has also fallen below 20.

BTC Skew/Kurtosis

  • The short-term skew prices gradually recovered this week (returning from being heavily skewed to the downside), as there are quite few positions left to liquidate below the currency price, while BTC price also held its ground during the S&P index pullback. On the longer end, due to selling pressure on the downside of the currency price, the skew slightly adjusted upward.

  • Kurtosis has gradually declined this week along with the compression of implied volatility and the decay of actual volatility fluctuations. The market has also seen some 1x2 ratio call spreads from directional traders, which sell implied volatility and kurtosis simultaneously, further lowering the prices on the wings. We expect kurtosis to find a foothold here, and any breakthrough of the 80-90 thousand dollar range may lead to an increase in actual volatility.

Wishing everyone good luck this week!