BTCVolatility Weekly Review (December 23rd-30th)

December 30th, 4:00 PM Hong Kong Time) 93,500 USD), ETH against USD increased by 3.0% (3,300 USD

Although the price trend over the past week has been quite volatile, it ultimately remained between $92,500 and $99,000, leading to a reduction in actual volatility (at least between settlement points). We speculate that this trend will continue for the next few trading days, but there may be volatility at the end of the year settlement. At the same time, this longer price adjustment may end before the end of the year, preparing for the next round of increases. The current support level is as low as $92,000, and we expect good support at the $90,000 level, with the next support level falling all the way to $85,000. If it falls below the support of $85,000, we will see more substantial declines, but we believe that this situation is very unlikely to occur. Moving to the price above, if the price successfully regains the psychological point of $100,000, it will open the opportunity to reach the high point and reach our target price level of $115,000-$120,000 (expected in the middle and early stage of the first quarter). Market theme: During a very quiet holiday week, prices consolidated under the influence of a more hawkish Fed meeting, the US stock market declined for a rest while the US dollar (against other fiat currencies) rose. The momentum in the cryptocurrency market is starting to shift downwards. The market is currently undoubtedly long, yet it is difficult to find signs of buyers. It is rumored that MSTR will enter a quiet period before the January performance report, which also reduces the pressure on BTC prices to rise in the coming weeks. BTC ATM Implied Volatility:

Despite some fluctuations in the price, as the price finds balance in the large range of 92,000 to 99,000 US dollars, the overall level of actual volatility continues to decline. However, the implied volatility for February and beyond remains stubbornly high, as the market is still digesting a lot of demand earlier this month. We expect the implied volatility to decrease more reasonably in January. The current market pricing for first-quarter implied volatility averages more than 60 points per week, which is difficult to sustain based on historical data. Although we expect to see an increase in volatility in January as the market adjusts its positions at the beginning of the new year and as Trump is inaugurated on the 20th, BTC assets themselves have become more stable and are well supported by inflows from ETFs. Therefore, we believe that sustainable actual volatility will be in the range of 40-50, rather than the current pricing above 60 points for February/March and beyond. BTC Skewness/Kurtosis:

Although the implied volatility remains unchanged at low prices, the actual volatility below is quite high, and the skewness continues to rise this week. The market continues to seek opportunities for an increase in 2025 and take advantage of the current lower coin price. At the same time, the large buying flow earlier this month caused a short position in the middle of the curve. With the correlation between coin price and skewness disrupted, kurtosis unilaterally declined. Meanwhile, the demand for the lower wing side in the medium to long term is still missing (only a few strategic buyers in the short term to prevent the coin price from plummeting to below $90,000). The broadcast for 2024 is now over! Thank you for reading and Happy New Year!