Key Indicators: (December 2 4pm -> December 9 4pm Hong Kong time)
BTC against USD rose 3.9% (95,900 -> 99,600 USD), ETH against USD rose 7.4% (3,640 -> 3,910 USD)
BTC against USD December (year-end) ATM volatility fell 0.6 points (55.8 -> 55.2), 25d skewness fell 0.7 points (4.9 -> 4.2)
Looking at the trend, the spot market is still correcting the price. Although the coin price has hit a new high above 100k USD, it has since fallen back sharply. We believe that any upward movement will be sold off, but there will be strong market demand when it falls, so we expect a unilateral correction trend (gradual flattening of price movements). The current resistance level is mainly between 99k USD and 104k USD, and the support level starts from 94k USD down to 85k USD.
Although the price will fluctuate in this range at first, we expect the actual volatility to eventually weaken (provided the price does not break through). If the price falls below, we will be brought back to 76k USD. Any substantial upward breakthrough will cause the price to reach the ultimate range of 115k USD-120k USD earlier than expected (we originally expected it to be in January to February next year).
Market Themes:
Bitcoin finally broke through the psychological barrier of 100k USD last Thursday, triggering the price to test 104k USD twice, both times receiving good support. At first it felt like this level was the answer the recent bullish trend had been eagerly awaiting, but in the following 24 hours the momentum quickly weakened, and we retreated back below 100k USD. This triggered the liquidation of new long positions above 100k USD, causing the price to drop as low as 90k USD. But it didn't last long, as the market regained 100k USD during the New York trading session and stabilized in the 96-100k USD range.
As the overall market sentiment remains bullish, other cryptocurrencies have continued to rise. The ETH against USD price has also pushed above the 4k USD psychological barrier, but is still 20% away from its all-time high.
Price volatility in traditional financial markets has been relatively calm. The implementation of martial law in South Korea caused brief concerns (also causing BTC to briefly dip to 93k USD), but was later proven to be just local political turmoil and quickly subsided. China has again promised to provide stimulus policies next year to address the generally weak market conditions since Trump's election and the promised new round of tariffs. Finally, US labor data continues to show signs of gradual weakening. Last week's non-farm payroll report did not impact the Fed's gradual rate cut actions. Overall, we continue to believe that the macroeconomic backdrop supports risk assets.
BTC ATM Implied Volatility:
Overall, the market volatility was very high last week. First it dipped to 93k USD due to the martial law in South Korea, then broke through 100k USD and approached 104k USD, before falling back due to liquidations, reaching as low as 90k USD. Despite such large fluctuations, the high-frequency actual volatility was around 60 points, which is only the pricing of the average weekly implied volatility for Q1 next year!
Therefore, most of the surge in implied volatility has subsided, especially for the expiries before the end of the year. Unless the 90-104k USD price range is completely broken, the actual volatility will be hard to maintain at that level. However, at the far end of the term structure, the market has seen significant buy-side flow, especially above the March and June expiries (strike prices of 150-200k USD), causing the premium to rise after the January expiry. Again, considering the actual volatility as high as last week, the market will have difficulty maintaining such high implied volatility without a significant breakthrough in the spot price.
BTC Skewness/Kurtosis
Despite some rather violent corrections in the spot market, the skewness price has remained largely stable this week. The market's demand is still mainly concentrated on the upside, with limited hedging demand on the downside in the short term.
Accompanying the rise in actual volatility, kurtosis has generally risen this week, also due to the market's demand for one-sided purchases (especially on the upside).
Wishing you all the best for the coming week!
You can use the SignalPlus trading compass feature at t.signalplus.com to get more real-time crypto news. If you want to receive our updates immediately, feel free to follow our Twitter account @SignalPlusCN, or join our WeChat group (add the assistant WeChat: SignalPlus 123), Telegram group and Discord community to interact with more friends.
SignalPlus Official Website: https://www.signalplus.com
