Key Indicators: (April 14 4 PM -> April 21 4 PM Hong Kong Time)
BTC against USD rose 3.6% (84,450 USD -> 87,500 USD), ETH against USD fell 1.9% (1,620 USD -> 1,590 USD)
A week has passed since the market explored the 75,000 USD turning point after the election. This week, the coin price has remained completely above 80-81.5 thousand USD, further confirming that this Double Bottom price is a strong support level. Our basic view is that the coin price will remain at a higher level in the 81-90 thousand USD range in the next few trading days or even weeks. If the coin price breaks through 91-92 thousand USD, the market will attempt to break through 100,000 USD and then create a new high again. Conversely, if the coin price falls below 73-73 thousand USD, we will see the price drop to 60-65 thousand USD.
We remain bullish in the medium term and believe that the coin price will reach new highs in the next few quarters, with technical targets between 115-125 thousand USD. However, the specific path and timing remain elusive.
Market Themes
Overall, after experiencing large-scale position adjustments and deleveraging, all markets have been calmer this week, and most "bad news" related to tariffs have been released (including the latest announcement restricting chip exports to China). Powell mentioned being cautious about rate cuts in his speech, pointing out the risk of higher inflation, but was not well received by the market or Trump. Subsequently, weekend reports indicated that Trump said he was "trying to remove Powell from office", triggering a new round of USD selling on Monday after Easter, with the credibility of US assets continuing to be damaged by Trump. The VIX index continues to remain above 30, as the market is still very concerned about potential unexpected news from Trump and his government.
Returning to cryptocurrencies, Bitcoin has broken its correlation with the S&P index or US stocks for the first time since late February, ignoring stock market weakness and VIX index increases. It was more influenced by the weakening USD and synchronized with gold and G10 currencies. Meanwhile, other small coins struggled to rise in a weak stock market environment. Therefore, Bitcoin's performance exceeded expectations more as a way to diversify assets away from the USD and related assets. If this trend continues, Bitcoin should have room for significant increases to catch up with gold's gains this year. We still believe that in the current environment, Bitcoin can truly enter its next stage only after breaking its correlation with US stocks.
BTC Implied Volatility
After the actual volatility dropped, the implied volatility also dropped sharply. As market positions became clearer and the coin price found balance in a narrow range of 83-85 thousand USD, the actual volatility was locked at over 30 for most of last week. The implied volatility dropped significantly with market selling before the Easter holiday, and then naturally adjusted back after the weekend ended and the coin price showed an upward trend.
Although other markets remain more volatile than before, Bitcoin is beginning to decouple from other assets, especially the S&P index. If this continues, it will further impact the far end of the term curve and lead to a reduction in Bitcoin volatility. This is crucial for Bitcoin as a diversification alternative to the USD and its assets.
BTC Skew/Kurtosis
The short-term skew price has gradually returned from extremely downward to flat, consistent with the coin price rising on Monday and the increase in actual volatility. Overall, the market feels more comfortable around the current price point, as although the implied volatility rose 5% on the one-day expiration, the longer end was not significantly affected, suggesting the market has long positions at the current price range, and we also see some long-term players repositioning covered call positions as the price rises.
As the implied volatility pricing is lowered and the coin price stabilizes in the technical range of 82-90 thousand USD, the kurtosis on both wings has been widely suppressed. However, if this range is broken, we expect to see a significant increase in actual volatility (and implied volatility), so in the current environment, considering the spot technical indicators and very high actual volatility fluctuations, we still recommend maintaining wing positions given the correlation between skew and spot.
Good luck this week!
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