Key indicators: (November 18, 4 PM - November 25, 4 PM Hong Kong time)
BTC against USD increased by 7.0% ($91,750-$98,200), ETH against USD increased by 8.6% ($3,140-$3,410)
BTC against USD year-end (December) ATM volatility increased by 3.0 points (57.0->60.0), year-end 25d skewness decreased by -1.0 points (5.9->4.9)
The upward trend in prices continues, but actual volatility is slowing down and momentum is gradually stagnating. These signs suggest that a peak may be emerging in the short term (but whether we have reached the peak or will continue to break through $100k remains to be seen).
We believe that washing the warehouse will not lead to a significant drop in coin prices, as there is very good support between $85k-$93k, and the chaos and frenzy caused by MSTR will temporarily provide enough buy orders for the market. The market price trend aligns well with the Elliott wave theory we have been tracking.
If the coin price breaks through $100k–$104k, it will further open up space for a third wave of upward trends (as shown in the chart), and it would mean that the rise will continue to $130k–$150k, rather than the $115k–$120k we currently think.
Market Theme:
In the past week, the 'Trump trade' has continued. The US dollar has strengthened against other fiat currencies, and US Treasury yields have been rising. The performance of cryptocurrencies has once again decoupled from the dollar. Bitcoin tested a high of $99.8k, losing momentum before the critical psychological level of $100k. Other altcoins have also shown stunning gains, and ETH has finally awakened from its slumber.
Scott Minerd has been confirmed as Trump's Secretary of Treasury, eliminating potential bullish factors from Howard Lutnick possibly being elected.
Last week, MSTR announced the purchase of 55k bitcoins (at an average price of $97,862, totaling $5.4 billion), fully utilizing the funds raised from selling stocks and issuing convertible bonds. As prices approached the peak, the impact of ETF holders rebalancing their positions outweighed MSTR's continued purchases, thus keeping the overall supply and demand in the market relatively balanced within the $97k–$100k price range.
ATM Implied Volatility:
Although the price hit $100k at one point this week, considering all factors, a stable short-term implied volatility is very reasonable, as the actual volatility has not increased substantially due to the active price of the coin. There is a demand for more upside opportunities in the forwards, leading to an increase in implied volatility for March/June.
If the spot price struggles to break through $90k–$100k, we expect the market to take profits on short-term positions by the end of the year, leading to increased pressure on the short-term curve, especially with Thanksgiving and Christmas approaching. Naturally, this will cause the term structure to steepen.
Skewness/Kurtosis:
This week, skewness remains relatively stable. As the coin price failed to break through the $100k mark, market unease over the downward correction of the coin price is growing. Moreover, implied/actual volatility struggles to rise at price peaks, especially in the short term, which suppresses the correlation between price and volatility and further dampens skewness. At the far end of the curve, the correlation between price and volatility is more evident (implied volatility for March/June/September is higher at price peaks), thus skewness finds better support at the far end of the curve.
Accompanied by a significant increase in actual volatility this week, kurtosis has also surged. We observe a demand for wing-side strike prices in the market, especially around the upper $100k. At the same time, there is also a demand for short-term lower strike prices in the market, mainly to protect spot and margin.
Wishing everyone good luck in the coming week!
