BTC Volatility Weekly Review (April 28 - May 5)

Key Indicators (April 28, 4 PM - May 5, 4 PM Hong Kong Time)

• BTC to USD price unchanged ($94,700 -> $94,700), ETH to USD up 1.4% ($1,800 -> $1,825)

• This week, as the market stabilized, cryptocurrency prices fluctuated within a small range and failed to touch the key resistance level of $99,000-$100,000. The support at $89,000-$91,000 currently maintains the price within this range, but if this support level is broken, the price may adjust significantly down to $85,000. With the end of several holidays last week, we expect to see prices move in one direction—possibly testing $100,000—but if it fails to break through, it may lead to an extended period of low volatility.

• We remain bullish on Bitcoin, expecting it to reach $115,000-$125,000 in the coming months or quarters.

Market Themes

• Last week was relatively calm for global markets due to the holidays. Stock markets continued to rise. With Trump and Bessent continuing to push for agreements with China, as well as agreements with other countries or regions "soon to be announced" (which the market has already anticipated), the S&P index has recovered the gap since "Trump Liberation Day" in early April. Non-farm payroll data was the main data point this week, with unexpectedly strong figures easing concerns about an economic slowdown and supporting the rise of U.S. stocks, while several leading companies also reported strong earnings.

• In terms of cryptocurrency, last week was very quiet. Bitcoin remained largely unchanged for seven consecutive days, although it briefly rose to $97,800 on Friday night before quickly retreating. MSTR continued to buy Bitcoin (with a total purchase value of $180 million last week) and announced another round of equity plans to continue buying Bitcoin (as the first round of $2.1 billion in equity has been completed), but overall this wave of buying has been fully absorbed by the market. Currently, the $92,000-$96,000 range appears to be the equilibrium price range for Bitcoin. We had long stabilized here since February and hovered around this level before tariff news. Therefore, we expect to see a prolonged consolidation within the current range unless significant external factors come into play.

BTC ATM Implied Volatility

• Last week, implied volatility briefly rose on Monday due to the price increase, then gradually decreased. High-frequency actual volatility is locked in at just above 30, while the term structure is very steep (the market is currently pricing a return to volatility levels in the 50s by the end of May to June), indicating that it is difficult to make money on any long positions at the far end of the term. We suspect that the market is holding long positions due to selling pressure over the past few weeks and is finding it hard to hold, which is why the short-term expiration volatility has been pushed down.

• In the very short term, the market is currently not pricing much for this week's Federal Reserve meeting (only pricing a 40 bps price change). We expect to see relevant buyers appear soon.

BTC Skew/Kurtosis

• As the price briefly broke through $97,000 and there was a glimmer of hope for a rise to $99,000-$100,000, the skew was momentarily tilted upwards. However, the price ultimately stagnated and fell below $94,000 at the beginning of this week, pushing the skew price back to lower levels as the market realized that the price could develop in either direction.

• Due to the low actual volatility this week and the price remaining in a comfortable zone, selling pressure on both sides has increased, lowering the kurtosis. However, considering our currently low volatility, we believe that breaking through the current range of $89,000-$99,000 will accelerate the rise. This will also be accompanied by a significant skew towards the corresponding side (meaning breaking above $99,000 skews upwards, while breaking below $89,000 skews downwards).

Wishing everyone good luck this week!