Key Metrics: (January 13, 4 PM -> January 20, 4 PM Hong Kong Time)

• BTC against USD increased by 14.8% ($93.5k -> $107.3k), ETH against USD increased by 5.1% ($3.22k -> $3.38k)

Overview of BTC Spot Technical Indicators:

• The price found strong support several times around $92k, including a brief drop below $90k but quickly rebounded. It then rose steadily, closing the week by breaking through $100k, accumulating enough momentum before Trump's inauguration. After breaking $100k, the price experienced several pullbacks but then recovered, refreshing its historical high with a large bullish candle before pausing at the next psychological level of $110k.
• From a technical perspective, the market will only activate more upward momentum after fully breaking through $110k, reaching our initial target range of $115k-$120k. Otherwise, if the upward breakout does not materialize, the market will temporarily operate within a broad range of $90k-$110k, indicating a fairly volatile single-direction price movement in the coming weeks.

Market Themes:

• On the macro market front, the Producer Price Index (PPI) released on Tuesday showed weakness, setting the stage for Wednesday's slightly disappointing Consumer Price Index (CPI). This eased market concerns about the Federal Reserve not making even a single rate cut.
• The market is actively seeking opportunities to buy cryptocurrencies before Trump's inauguration. Rumors of "crypto-friendly policies" have been circulating since last week. In a more favorable macro backdrop, the market did not hesitate to push Bitcoin's price temporarily up to $106k last Friday evening. The events over the weekend (do we still need to mention Trump coin…) were not significant, but there is a potential risk of damaging Bitcoin's reputation during Trump's presidency, considering the instantaneous wealth increase of Trump's team. Although SOL benefited in the short term, Bitcoin ultimately outperformed other altcoins. Following the news of "Trump WLFI purchasing 14.4k ETH," ETH surged against BTC briefly but quickly faded.

BTC ATM Implied Volatility:

• Last week, the volatility pricing for the inauguration event began to rise. Initially, the daily volatility was priced around 80-82 points (equivalent to a 3.2% price fluctuation) but was gradually raised, stabilizing at a volatility of 90 points over the weekend. However, before Monday's settlement, volatility spiked by 5%, pushing the inauguration day's volatility up to 110 points (equivalent to a 4.5% price fluctuation). Given that there has indeed been such significant volatility in the short term, it is hard to dispute this pricing.
• At the far end of the term structure, volatility fluctuations remain quite high, especially for the February and March expiration dates, with significant flow on both sides, causing the curve to fluctuate by 2 points in a short time. Overall, the implied volatility for these expiration dates is roughly around 60 points, considering that the actual volatility in the 72 hours before the event was close to 45, this pricing seems quite high. However, the market may be factoring in the uncertainty brought by the Trump administration's plans for cryptocurrencies, leading to a term premium.

BTC Skew/Kurtosis

• Overall, this week's skew has gradually increased due to rising demand from the upside, especially as the price held up against pressure below $90k and regained $100k. The most notable demand from above is the Gamma term that includes the expiration date of the inauguration, considering the tail risks brought by potential strategic savings policies on the upside. However, at the far end of the term structure, the price movement of skew is more moderate, as the market has not rolled over or increased more single-leg long positions on the held call spreads, suggesting that the market has already heavily deployed too many positions from the flow at the end of December and expects to roll over again after the price breaks $120k.
• Aside from the demand for the inauguration on the Gamma term, there has been little volatility in kurtosis. New upward demand mainly comes through call spreads or call butterflies, with net positions providing wing-side buying pressure to the market. However, considering our current high volatility of actual volatility and the local range defined at $90k-$110k, we believe that holding short positions within this range while being long outside the range is a relatively good strategy.

Wishing everyone good luck in trading this coming week!