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

• BTC against USD rose by 1.5% (82.3k USD -> 83.5k USD), ETH against USD fell by 8.2% (2.07k USD -> 1.9k USD)

Overview of BTC against USD Spot Technical Indicators

• The spot price of Bitcoin has continued to decline over the past week, but as the price stabilized in the 80-85k USD range, we finally saw actual volatility begin to decrease. Notably, the price hit a recent low last week, and the market closely monitored price movements in the following days, trying to guess whether the next major volatility would be upward or downward. Considering we have experienced a long period of high volatility, we believe the price will undergo some adjustments and stabilization, expecting support levels around 78-80k USD in the coming week, with recent resistance levels at 85-86k USD, and further up at 89.5-92k USD.

• If the price falls below 78-80k USD, the market may return to a high volatility range. Conversely, if it breaks above 92k USD, we will begin to test the more significant long-term resistance level of 98-100k USD. 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 has been another week of significant volatility. The S&P 500 index hit new lows amid ongoing long-short balance in stock funds and deleveraging. Rumors suggest that several assets have experienced substantial pullbacks, but there is nothing new on the narrative level to support this news. The market has become numb to the back-and-forth tariff policies, ultimately viewing this as a correction and deleveraging that should have occurred long ago, but the market has optimistically ignored this risk for many years. Structurally, volatility is gradually manifesting in this cycle, and the VIX (Volatility Index) is unlikely to remain in the teens over the next few months. Of course, there will be periods of calm and stability in between.

• As for cryptocurrencies, Bitcoin fell below 80k USD several times last week, as the market continued to clear excess positions. Meanwhile, Ethereum broke below the critical support of 2k USD and has since failed to regain upward momentum. Throughout the week, Bitcoin performed better than the S&P 500 and Nasdaq indices, but remained heavy during the New York session, before rebounding during the Asian session. Overall, positions across various markets are cleaner now, and we believe the high correlation across assets will not continue. Bitcoin will only drop to new lows if the S&P index experiences a substantial decline.

BTC Implied Volatility

• The decline of the S&P index during the New York session on Monday led to a surge in implied volatility for U.S. stocks, while also raising Bitcoin's implied volatility, which subsequently dropped significantly throughout the week. Actual volatility has also gradually decreased this week, with weekly actual volatility falling below 50 for the first time in recent weeks, settling in the low 40s. The decrease in implied volatility is more pronounced in the short-term expiration dates, while there is a slight decrease at the far end of the curve. Selling pressure appeared on the June expiration date as mid-term players cleared structural long positions.

• Based on the current situation, we expect the market to continue stabilizing while waiting for new catalysts, thus actual volatility will remain relatively stable. The April 4 expiration date 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 sharp downward bias. After the clearing from Sunday to Monday last week, the market's lower positions are very clean, meaning there won't be many positions to trigger liquidations during the next price pullback. At the far end of the term structure, the skew price remains relatively stable, as structurally, mid to long-term players are not interested in the downside of the price.

• The kurtosis ended the week virtually unchanged. However, it fluctuated significantly throughout the week with changes in implied volatility. Although we believe holding long kurtosis is still favorable, in the short term, due to the price fluctuating within a limited range, long kurtosis may incur losses on Theta. Therefore, we are more inclined to hold long kurtosis at the far end of the curve, seeking a narrative change when the price breaks through the 70-105k USD range after the elections.

Wishing everyone good luck this week!