Key Indicators: (December 30, 4 PM -> January 6, 4 PM Hong Kong Time)
BTC against USD rose by 6.2% ($93,500 -> $99,300), ETH against USD rose by 7.4% ($3,400 -> $3,650)
Spot Technical Indicators
At the end of 2024, the coin price maintained the support point at $92,000. As the New Year begins, we see the market starting to show a willingness to buy, with the coin price slightly rising towards the resistance level of $100,000. This strongly suggests that the market is gearing up for the next rise and accumulating long positions during the pullback. We believe that in the long run, the coin price will be in the range of $115,000 to $120,000.
We believe the short-term coin price peak will be at $100,000 or slightly above, and we expect sellers to appear around that level. If there is a lack of follow-up buying, it may trigger a pullback to the range of $95,000 to $96,000. However, if the price breaks through $100,000 completely, the next peak will appear at $102,000 to $103,000, followed by $104,000 to $105,000, and finally reaching the previous high of $108,500. On the downside, the initial support point is at $95,000 to $96,000, and a further decline would reach below $92,000.
Market Themes
Another turbulent holiday week. The cryptocurrency market has once again dipped within a certain range, with BTC against USD falling below $93,000; ETH against USD dropping below $3,300. However, the arrival of the New Year has brought upward momentum to the market. It seems the market is adjusting positions ahead of Trump's inauguration this month.
Among other assets, the 'Trump trade' has regained momentum. The US dollar dominates in trades against G10/Asia, while the S&P 500 Index (SPX) has begun to recover after the decline that started on the first day of the year.
On the macro front, there is relatively little data this week until the non-farm payroll data is released on Friday. The market is particularly looking forward to this data, especially after the Fed's relatively hawkish stance in December caught the market off guard. If there is any downside surprise, the market may quickly reprice in preparation for faster rate cuts.
BTC Implied Volatility
Despite significant fluctuations in the coin price, the overall actual volatility continues to decline, further leading to a persistent decrease in implied volatility, especially for January expiration. Currently, the implied volatility for January expiration is already lower than the same time last week, even with the flow of Trump's inauguration and ETF rebalancing at the beginning of the New Year.
At the far end of the curve, implied volatility still shows resilient buying. This is because the market continues to digest the large demand that emerged in December, especially for the expiration dates in February and March. Considering the downward correction that has already occurred in January expiration, we expect to see the implied volatility at the far end gradually return to normal.
BTC Skew/Kurtosis
As the market's liquidity fully recovers and the market returns from the year-end low point in coin prices with lower actual volatility, the skew this week is showing a downward trend. If the market continues to rise slowly before the inauguration, we expect the actual volatility to perform poorly, as the market distribution on the upside is relatively even. However, if we see the coin price sharply decline again, players in the market may actively participate in bets above the price.
For the same reasons as above, kurtosis remains relatively low. The market demand for wingside has begun to decrease, as the spot market has moved away from the potential large slippage around $90,000. At the same time, the demand for single buyers on the upside is also gradually decreasing, or has shifted to bullish spreads, applying selling pressure on kurtosis. The low correlation between spot and skew has also dragged down the price of kurtosis.
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