Key indicators: (April 14, 4 PM -> April 21, 4 PM Hong Kong Time)

  • BTC against USD rose by 3.6% (84,450 USD -> 87,500 USD), ETH against USD fell by 1.9% (1,620 USD -> 1,590 USD)

  • Since the market dipped below the 75,000 USD pivot point after the elections, a week has passed. This week, the coin price has completely stayed above 80,000 to 81,500 USD, further confirming that this double bottom price is a strong support level. Our fundamental view is that the coin price will remain high in the range of 81,000 to 90,000 USD over the next few trading days or even weeks. If the coin price breaks above 91,000 to 92,000 USD, the market will attempt to break through 100,000 USD and then reach new highs again. Conversely, if the coin price falls below 73,000 to 73,000 USD, we will see the price realistically drop to 60,000 to 65,000 USD.

  • We remain bullish in the medium term and believe that in the coming quarters, the coin price will reach new highs, with technical targets between 115,000 and 125,000 USD. However, the specific path and timing remain elusive.

Market themes

  • Overall, after experiencing large-scale portfolio adjustments and deleveraging, various markets have shown calmer behavior this week, while most of the 'bad news' related to tariffs has already been released (including the latest announcement to restrict chip exports to China). Powell mentioned a cautious attitude towards interest rate cuts in his speech, pointing out the risk of higher inflation, but this was not well received by the market or Trump. Subsequently, reports over the weekend indicated that Trump stated he was 'trying to remove Powell from office,' triggering a new round of dollar selling on the Monday after Easter, further damaging the credibility of US assets under Trump. The VIX index continues to stay above 30, as the market remains very concerned that Trump and his administration may bring more unexpected news.

  • Returning to cryptocurrency, Bitcoin has broken its correlation with the S&P Index or US stocks for the first time since the end of February, ignoring the weakness in the stock market and the rising VIX index. It is more influenced by the weakening dollar and has risen in sync with gold and G10 currencies. Meanwhile, other altcoins have struggled to rise in the weak stock market environment. Therefore, Bitcoin's better-than-expected performance is more about diversifying away from a single dollar and related assets. If this trend continues, Bitcoin should have room to rise significantly to catch up with gold's gains this year. We still maintain that in the current environment, Bitcoin can truly enter the next stage only after breaking its correlation with US stocks.

BTC implied volatility

  • After the actual volatility dropped, implied volatility also plummeted sharply. As market positions became clearer and the coin price found balance in a very narrow range of 83,000 to 85,000 USD, actual volatility was locked at above 30 for most of last week. Implied volatility dropped significantly ahead of the Easter holiday as the market sold off, and then naturally corrected as the weekend ended and the coin price showed an upward trend.

  • Although other markets remain more volatile than usual, Bitcoin has started to decouple from other assets, especially the S&P index. If this situation continues, it will further affect the long end of the term structure and lead to lower Bitcoin volatility. This is crucial for Bitcoin as a diversification alternative to the dollar and its assets.

BTC skew/kurtosis

  • The short-term skewed prices have gradually returned to flat from being extremely downward biased, consistent with the coin price rising on Monday and the increase in actual volatility. Overall, the market feels more comfortable around the current levels because although implied volatility saw a 5% increase on the expiration day within a single day, the further end was not significantly affected, suggesting that the market has long positions in the current price area, and we also see some long-term players starting to re-establish covered call positions as the coin price rises.

  • With implied volatility pricing lowered and the coin price stabilizing in the technical range of 82,000 to 90,000 USD, sellers on both wings have significantly reduced kurtosis. However, if this range breaks, we expect to see a substantial increase in actual volatility (as well as implied volatility), so considering the technical indicators of spot in the current environment, and the very high actual volatility fluctuations, skewness, and the correlation between spot, we still recommend holding wing positions.

Wishing everyone good luck this week!