Key Indicators (April 28 4 PM - May 5 4 PM Hong Kong Time)
BTC to USD price unchanged (94,700 USD -> 94,700 USD), ETH to USD up 1.4% (1,800 USD -> 1,825 USD)
This week, as the market stabilized, cryptocurrency prices fluctuated within a small range, failing to reach the key resistance level of 99-100 thousand USD. The support at 89-91 thousand USD currently maintains the price within the current range, but if this support is breached, the price could significantly adjust downward to 85 thousand USD. With the end of last week's holidays, we expect to see the price being moved unilaterally - possibly attempting to probe 100 thousand USD - but if unable to break through, it may lead to an extended period of low volatility.
We remain bullish on Bitcoin, expecting it to reach 115-125 thousand USD in the next few months or quarters.
Market Themes
Because last week was mainly holidays, the global markets experienced another quiet week. Stock markets continued to rise. With Trump and Benson continuing to push for agreements with China, and agreements with other countries or regions "about to be announced" (though the market has already anticipated this), the S&P index has recovered the gap since the "Trump Liberation Day" in early April. Non-farm data was the main data this week, and surprisingly strong data quelled concerns about economic slowdown, supporting the rise of US stocks, while earnings data from several leading companies were also quite strong.
For cryptocurrencies, last week was very quiet. Bitcoin remained essentially unchanged for 7 consecutive days, briefly rising to 97.8 thousand USD on Friday night before quickly falling back. MSTR continues to buy Bitcoin (purchasing a total of 180 million USD last week) and announced another equity plan 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 92-96 thousand USD range appears to be Bitcoin's equilibrium price range. We were stable here for an extended period in February and hovered here before the tariff news. Therefore, we expect to remain in the current range for a considerable time, unless significant external factors intervene.
BTC ATM Implied Volatility
Last week, implied volatility briefly increased on Monday due to price climbing, then gradually decreased. High-frequency actual volatility is locked at around 30, with a very steep term structure (currently pricing a volatility level in the 50s from late May to June), meaning it's currently difficult to profit from long positions at the far end of the term. We suspect the market is holding long positions due to selling pressure in recent weeks and finding it difficult to maintain, which is why volatility at short-term expiration dates has been suppressed.
In the very short-term horizon, the market currently has not priced in much of the upcoming 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 thousand USD and showed signs of exploring 99-100 thousand USD, the skew was momentarily intensely biased upward. However, the price ultimately stagnated and fell below 94 thousand USD at the beginning of this week, pushing the skew back to a lower level, as the market realized that the price could develop in either direction.
Due to this week's low actual volatility and price remaining in a comfortable range, selling pressure on both wings has increased, depressing kurtosis today. However, considering our current low volatility, we believe breaking through the current 89-99 thousand USD range will accelerate the rise. This will also be accompanied by a significant skew towards the corresponding side (meaning breaking 99 thousand USD will skew towards the upside, while falling below 89 thousand USD will skew towards the downside).
Good luck this week!
