BTC Volatility Weekly Review (April 21-28)

Key indicators: (April 21, 4pm -> April 28, 4pm Hong Kong time)

• BTC/USD rose 8.2% (87,500->94,700 USD), ETH/USD rose 13.2% (1,590->1,800 USD)

• Last week we saw the price of the coin break through the key resistance level of $89-91k (in line with the 100-day moving average) cleanly and quickly, faster than we initially expected (and seemingly beyond market expectations). At present, we expect the price of the coin to take a breather and consolidate in the comfort zone of $92-99k, especially considering the upcoming Labor Day and local holidays in Asia.

• In the next few weeks, we expect the market to start trying to break through the $100k resistance, but it does have to penetrate a lot of selling orders before that. If it falls below $89k, the price may pull back to $82-89k, but we expect a lot of buying support in the $91-89k range. In the medium term, we still remain bullish and expect to reach new highs in the next few quarters, with a target price of $115-125k. The current price trend looks clearer after breaking through the key resistance level.

سوق سمة

• Risk assets had a good week. Trump and Bessant moderated their stance on US-China tariffs, suggesting an admission that they were too tough (China refused to comply with the expensive treaty), while Trump also denied reports that he would remove Powell as Fed Chairman anytime soon. While the reasons for Trumps change of attitude are hard to pin down, the timing of the change, which came at the lowest point of his tenure, does not seem to be a coincidence. It also confirms that Trump is still influenced by his base and does not want to push the US economy into recession, especially before the midterm elections. Long-term Treasury yields quickly fell from their highs, and the stock market regained its footing, with the SP back above 5,500 – even after a chaotic battle, it is only 10% off its all-time high. The VIX panic index finally returned to below 25 after an unexpectedly long stay above 30.

• ل تشفيرcurrencies, Bitcoins correlation with the SP continues to weaken, but it is still supported by risk assets, briefly breaking through $95,000 last weekend. Other small coins have finally joined the rise, showing a stronger correlation with risk assets. Ethereum briefly touched $1,800, but still lacks the momentum to rise further. In general, it feels that Bitcoin still has quite a lot of obstacles before reaching $100,000, such as positions that were not sold in time before the last round of declines and positions that hope to re-enter the market at a lower point of $75-82,000. Therefore, we expect the price of the currency to stabilize in this range before there is a new catalyst.

BTC ATM Implied Volatility

• Although the price of the currency broke through $90,000 last week, the implied volatility is on a downward trend. This is because the market is accelerating the selling of both call and put options, especially as the sentiment of risk assets recovers and the star-to-star relationship between Bitcoin and the SP begins to weaken. On the other hand, the market expects to see a large number of sell orders before $100,000, so it is willing to sell call options to hedge spot positions when the price of the currency is higher. At the same time, the realized volatility remains quite low. Although the fluctuation range is large, the price movement is very orderly. The high-frequency realized volatility within 1 week is basically in the 30s.

• The term structure is still very steep. The market is unwilling to price in medium-term volatility lower. If the Bitcoin digital gold theory is true and breaks the correlation with the SP, the expectation of volatility should be sold, because any pullback will trigger more buying. Now, the pricing of volatility rolling down 3-4 points in a month like the June expiration date is still high, and we believe that long-term volatility should continue to be depressed if the market environment does not change.

BTC Skewness/Kurtosis

• The skewness of short-term maturities will rise with each rise in the price of the currency, but it will return very briefly. This is mainly because the actual volatility remains low when the price of the currency rises. The skewness of the long-term maturity has further returned to the normal level of the past year, because the market is more confident that Bitcoin will not experience a sharp increase in volatility when it falls like in the first quarter, even if the SP index or global stock prices fall.

• The kurtosis has been basically flat this week. In the current price range of 92-99 thousand dollars, considering the low actual volatility, it is difficult for the local price to rise, but outside of 88 thousand dollars/102 thousand dollars, considering the technical and psychological points, there is a possibility of a sharp increase in actual volatility.

I wish you all a smooth trading week!

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This article is sourced from the internet: BTC Volatility Weekly Review (April 21-28)

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