BTC Volatility Weekly Recap - (December 30th - January 6th)

January 6th, 4 PM Hong Kong Time) BTC rose by 6.2% against USD (from 93.5 thousand US dollars to 99.3 thousand US dollars), and ETH rose by 7.4% against USD (from 3.4 to 3.65 thousand US dollars) Spot technical indicators:

At the end of 24 years, the price of the currency maintained the support point of 92 thousand US dollars. At the beginning of the new year, we saw the market starting to show a willingness to buy, and the price of the currency slightly rose to test the resistance level of 100 thousand US dollars. This strongly indicates that the market is accumulating power for the next rise and accumulating long positions on the callback. We believe that the price of the currency will be in the range of 115-120 thousand US dollars in the long term. We believe that the short-term top of the price of the currency will be at 100 thousand US dollars or slightly higher than 100 thousand US dollars, and we expect sellers to appear near this point. If there is a lack of more follow-up buying, it may trigger a fall to the range of 95-96 thousand US dollars. However, if the price completely breaks through 100 thousand US dollars, the next top will appear at 102-103 thousand US dollars, followed by 104-105 thousand US dollars and finally reaching the previous high of 108.5 thousand US dollars. In terms of downside, the initial support point is at 95-96 thousand US dollars, and the continued decline will reach below 92 thousand US dollars. Market Theme: It's another turbulent holiday week. The cryptocurrency market has once again fallen within a certain range, with BTC dropping below 93,000 USD against USD; ETH dropping below 3.3 thousand USD against USD. However, the arrival of the new year has brought upward momentum to the market. The market seems to be adjusting positions ahead of Trump's inauguration ceremony this month. Among other assets, the 'Trump trade' has regained momentum. The dollar has an advantage in trading with the G10/Asia, while the S&P 500 index (SPX) has started to recover after a decline at the beginning of the year. On the macro side, there is relatively little data this week, until the release of the non-farm employment data on Friday. The market is particularly looking forward to this data, especially after the relatively hawkish stance of the Federal Reserve in December caught the market off guard. If there is any unexpected downside, the market may quickly reprice and prepare for faster rate cuts. BTC Implied Volatility

Despite the large local fluctuations in the currency price, the overall actual volatility continues to decline, leading to a further decline in implied volatility, especially for the January expiration date. Currently, the implied volatility for the January expiration date is lower than the same period last week, despite the flow of Trump's inauguration and ETF rebalancing at the beginning of the new year. In the far end of the curve, implied volatility still shows strong buying interest. This is because the market continues to digest the large demand that appeared in December, especially for the expiration dates in February and March. Considering the downward correction that has already occurred on the January expiration date, we expect to see the implied volatility in the far end gradually return to normal. BTC Skewness/Kurtosis:

With the full recovery of market liquidity and the lower actual volatility of the market compared to the low point of the currency price at the end of the year, the skewness this week is trending downward. If the market continues to rise slowly before the inauguration ceremony, we expect the actual volatility to perform poorly because the market distribution on the rising side is relatively evenly distributed. However, if we see a sharp drop in the currency price again, players in the market may actively participate in bets above the price. For the same reasons as above, kurtosis remains low. Demand for the wing side of the market has started to decrease as the spot market has moved away from the potential slip point near $90,000. At the same time, demand for single buy orders above has gradually decreased, or has been converted into bullish spreads and exerted selling pressure on kurtosis. The lower correlation between spot and skewness has also dragged down the price of kurtosis.