Key Indicators: (April 21, 4 PM -> April 28, 4 PM Hong Kong Time)

• BTC against USD increased by 8.2% (from $87,500 to $94,700), ETH against USD increased by 13.2% (from $1,590 to $1,800)

• Last week, we saw the prices cleanly and quickly break through the key resistance level of $89,000-$91,000 (in line with the 100-day moving average), faster than our initial expectations (and it seems to have exceeded market expectations). Currently, we expect the prices to take a breather and consolidate within the comfortable range of $92,000-$99,000, especially considering the upcoming Labor Day and local holidays in Asia.

• In the coming weeks, we expect the market to start attempting to break through the $100,000 resistance level, but before that, it will indeed need to penetrate a lot of sell orders. If it falls below $89,000, the price may retrace back to the $82,000-$89,000 range, but we expect strong buying support in the $89,000-$91,000 range. In the medium term, we remain bullish, expecting to reach new highs in the next few quarters, with target prices in the range of $115,000-$125,000. The current price trend looks clearer after breaking through the key resistance levels.

Market Themes

• Risk assets performed well this week. Trump and Bessent softened their stance on U.S.-China tariff issues, suggesting they recognized their previous positions were too hardline (China refused to comply with the "sky-high deal" offered), while Trump also denied reports of plans to dismiss Fed Chairman Powell in the short term. Although the reasons for Trump's change in attitude are hard to determine, the timing coincides with his approval ratings hitting a record low since taking office, which does not seem coincidental. It also confirms that Trump is still influenced by his voter base and does not want to push the U.S. economy into recession, especially before the midterm elections. Long-term Treasury yields quickly retreated from their highs, and the stock market regained its footing, with the S&P index returning to 5,500—despite a tumultuous period, it has only dropped 10% from its historical highs. The VIX fear index, after unexpectedly staying above 30 for an extended period, finally dropped back below 25.

• For cryptocurrencies, the correlation between Bitcoin and the S&P index continues to weaken, but it is still supported by risk assets, briefly breaking through $95,000 last weekend. Other altcoins finally joined the rally, showing a stronger correlation with risk assets. Ethereum briefly peaked at $1,800 but still lacks momentum for further increases. Overall, it feels like Bitcoin still faces considerable obstacles before reaching $100,000, such as positions that were not sold in time before the last downturn and those hoping to re-enter at lower levels of $75,000-$82,000. Therefore, we expect the prices to stabilize in this range until new catalysts emerge.

BTC ATM Implied Volatility

• Despite the price of Bitcoin breaking through $90,000 last week, implied volatility has been on a downward trend. This is because the market is simultaneously accelerating the selling of both call and put options, especially as risk asset sentiment recovers and the correlation between Bitcoin and the S&P weakens. On the other hand, the market expects to see a large number of sell orders before reaching $100,000, so there is a willingness to sell call options to hedge spot positions when prices are high. Meanwhile, actual volatility remains quite low; despite significant fluctuations, the price movements are very orderly, with high-frequency actual volatility over a week hovering around the 30s.

• The term structure remains very steep. The market is unwilling to price mid-term volatility lower. If the theory of Bitcoin as "digital gold" holds true and breaks the correlation with the S&P, then the expectation for volatility should lean towards selling, as any pullback would trigger more buying. Currently, pricing for volatility in June expiration within a month is still high, with a roll-off of 3-4 points, and we believe that long-term volatility should continue to compress unless the market environment changes.

BTC Skew/Kurtosis

• The skew for short-term expiration dates tends to rise towards the bullish side with each price increase, but it quickly returns to normal. This is mainly because actual volatility remains at a low level when prices rise. The skew for longer-term expirations has further returned to the conventional levels of the past year, as the market is more confident that Bitcoin will not experience the same volatility spikes as in the first quarter, even if the S&P index or global stock prices decline.

• Kurtosis has remained relatively flat this week. Within the current price range of $92,000-$99,000, considering the low actual volatility, it is difficult for prices to rise significantly. However, outside the $88,000/$102,000 range, there is a possibility of a sharp increase in actual volatility due to technical and psychological levels.

Wishing everyone successful trading this week!