Key Indicators (March 17, 4 PM -> March 24, 4 PM Hong Kong Time)

• BTC against USD increased by 4.1% (83,500 -> 86,900 thousand USD), ETH against USD increased by 8.9% (1,900 -> 2,070)

BTC against USD Spot Technical Indicators Overview

• With the price of the coin fluctuating quite stably between 81.5-87.5 thousand USD, BTC's actual volatility finally began to decrease last week. On March 24, the market appeared to be testing the resistance line of the downward trend since the high point at the end of February. If it crosses above 87.5-88 thousand USD, the price will re-test the resistance level of 91 thousand USD, and further up, 93 thousand USD will be a resistance point; if it continues to break through, the market will have enough momentum to test the more critical resistance level of 100 thousand USD.

• Conversely, if the price declines, the market will encounter strong support at 80 thousand USD, extending to 77 thousand USD, and will receive some buying support during the pullback. After breaking the key support at 73.5 thousand USD, we will face greater correction space. If it continues to decline to 60-65 thousand USD, our current view will no longer hold, indicating a more complex and long-term market turmoil. In the medium term, we remain bullish on the price, expecting it to rise to 115-125 thousand USD in the coming months or quarters.

Market Themes

• The market was quite calm over the past week. Powell's remarks at Wednesday's FOMC meeting eliminated hawkish possibilities, and the VIX index finally fell below the psychological barrier of 20, ending the week at 19 (down from a high of 29 two weeks ago), once again avoiding a government shutdown. Risk assets rose further over the weekend as news about tariffs on April 2 indicated that more targeted measures might be taken. Although Trump's actions on this issue are very unpredictable, the current panic and pessimism regarding tariff policies have already been priced into risk assets, so the market's reaction to tariff news in the short term will be asymmetric (i.e., the response to good news will be greater than the ongoing bad news).

• Back to cryptocurrencies, the market became excited again last Friday upon learning that Trump would deliver an unplanned speech at the New York Digital Assets Summit, but it turned out to be just a pre-recorded five-minute video. After briefly rising to 87 thousand USD, the price pulled back to 83 thousand USD over the weekend due to signs of a decline in risk assets, and then rose back above 87 thousand USD due to favorable tariff news. ETH also successfully broke through bearish resistance, continuing to show more sustainable gains after breaking 2 thousand USD on Thursday.

BTC Implied Volatility

• As the price of the coin found balance within the range of 81.5-87.5 thousand USD, actual volatility entered a quiet period, gradually lowering implied volatility over the past week. Even with the FOMC and Trump's speech at the DAS meeting included, the weekly high-frequency actual volatility dropped to 40 points, nearly the lowest since February. Overall, our view is that BTC's actual volatility will gradually decrease to the range of 30-40, but due to the significant fluctuations in actual price volatility, there is a possibility of occasional spikes to 50-60 points.

• The implied volatility curve's term structure steepened sharply due to the decline at the front end, while also lowering the implied volatility at the far end up to the end of September. The market seems to be removing the premium related to policy volatility, as the short-term narrative gradually becomes stale, and Trump has not shown signs of particular concern for Bitcoin prices. Additionally, since BTC has maintained the 80 thousand USD level despite the S&P index performing poorly, the implied volatility market has gradually eliminated considerations of U.S. stock beta volatility, as the actual correlation between the two is gradually weakening, and the VIX index has also fallen below 20.

BTC Skew/Kurtosis

• The short-term skew price gradually recovered this week (returning from a strong downward bias), as there are very few positions left to liquidate below the coin price, and BTC has held its ground during the S&P index pullback. At the longer end of the term, due to market selling pressure below the coin price, the skew has slightly adjusted upwards.

• The kurtosis has gradually decreased this week with the compression of implied volatility and the decay of actual volatility fluctuations. The market has also seen some 1 x 2 ratio call spreads from directional traders, which simultaneously sell implied volatility and kurtosis, further lowering the prices on the wings. We expect the kurtosis to find a footing here, and any breakout in the 80-90 thousand USD range could lead to an increase in actual volatility.

Wishing everyone good luck this week!