BTCVolatility Weekly Review (January 6th-January 13th)

Jan 13, 4 pm Hong Kong Time)

93.5 thousand dollars), and ETH fell 12% against USD (3.65 thousand dollars

BTC to USD spot technical indicators overview: Last week, the coin price experienced a retreat as expected after a period of increase. However, this decline had sufficient momentum and exceeded our initial expectations of 94-96 thousand US dollars, even dipping to the level of 91 thousand US dollars. Overall, aside from occasional probing breakthroughs, the coin price was able to hold at the level of 92 thousand US dollars and form a new support level. Subsequently, the coin price rebounded to the range of 92-98 thousand US dollars. As the new year began, the market tested the high points, and we saw the coin price forming a head and shoulders pattern. This further indicates the potential vulnerability of the coin price after breaking through the support level, possibly falling all the way to 88 thousand US dollars. As mentioned earlier, there are multiple support levels below the current position of the coin price, so we believe that any downward trend at the current position will be more of a slow decline or a turbulent decline, rather than a gap down. However, if the price falls below 88 thousand US dollars, we expect a substantial price correction before the next rise. Although the latter is not our primary expectation. Currently, we believe that the next major market movement will mainly be an increase rather than a decrease, but we will re-evaluate the price trend in the coming days—we expect that the current trend overall still has good upward momentum, although it has clearly not been the case in the past few trading days. Market Theme: This week's strong US data has unsettled the US bond market, shattering the illusion that the Federal Reserve's hawkish stance in December last year was too exaggerated, and at the same time reducing the risk of less than 2 interest rate cuts this year (the market has already priced in a comprehensive interest rate cut once). Because the US labor market is still hot, while average wages and prices continue to put upward pressure on inflation. The S&P 500 hesitated in the face of high interest rates (the US 30-year bond briefly touched 5%), leading to a 2% drop at the close on Friday. The situation in the global stock market is also not optimistic. The CSI 300 Index fell 5% in the first complete trading week, while the UK's economic pressure continued to increase amid questioning of the government (as revealed by Elon Musk), and weak data exacerbated the weakness of UK bonds and stocks. The cryptocurrency market showed high beta value in the face of macroeconomic risks this week, rising briefly to a prosperous start of 102,000 US dollars and then falling back. But overall, the downward trend is cushioned by high US interest rates and stock market corrections, and in the medium term, there is no clear bear market for cryptocurrencies. Implied Volatility

The local continuous volatility of the currency price did lead to an increase in the actual volatility last week. Even considering the extent of the volatility, the actual volatility was only at a level of just over 50, which is still lower than the average implied volatility of last week. However, overall, considering that the currency price is still searching for a clear direction, the implied volatility expiring in January has received good support at the current level. In the far end of the term structure, we see that the extremely high implied volatility at the beginning of the year was suppressed due to the impact of large flows in December, as expected. The lack of directional trends has also reduced the structural demand for volatility or directional trading and weakened support for options expiring from February to June. BTC skewness/kurtosis

With the comprehensive return of liquidity and the rise in actual volatility when the currency price is falling, skewness continued to decline this week. Especially within January, all maturity dates tend to favor put option transactions. However, the forward skewness prices still support an upward trend, as the market continues to seek structural bullishness after the weakening impact of macro risks in January and Trump's inauguration. The kurtosis is somewhat complex this week. The demand for the wings beyond 92-97k USD, especially driving the recent surface rise. While the demand for wingside Vega positions in the distant market has weakened (in fact, directional trading is mainly completed through call option spreads in the upward direction, forming selling pressure on the market).

Wish you all good luck in trading this week!