Key Indicators: (March 3 4pm -> March 10 4pm Hong Kong time) BTC vs USD Spot Technical Indicators Overview

• BTC vs USD fell 10.7% (92,200 USD -> 82,300 USD), ETH vs USD fell 14.8% (2,430 USD -> 2,070 USD)

BTC vs USD Spot Technical Indicators Overview

• Due to a series of news and crypto-related events last week, market volatility has remained high. Ultimately, the coin price was unable to stabilize and continued to fluctuate widely, with the downside support at 79-73 thousand USD and the upside resistance at 89-93 thousand USD.

• We had hoped that last week's bottom and rapid rebound would signal the end of a prolonged correction, but the coin price performance was disappointing. The resistance levels above the initial drop include 95-96 thousand USD, then 100-102 thousand USD, and finally 110 thousand USD. On the downside, if the price breaks below 73 thousand USD, it may retrace to 65-67.5 thousand USD, and the subsequent price trend may be more complex than currently expected. We maintain a medium-term bullish view, but the timeline may be further extended due to the lack of strong upward momentum.

Market Themes

• Due to the implementation of US tariffs, the VIX index has risen from 20 to 26 points, reigniting fears of a global trade war. At the same time, Europe and Germany's defense spending has triggered a sell-off of German government bonds, which has spread to Japanese, British, and US bonds, further complicating the entire risk market. The Trump administration appears eager to lower long-term interest rates and refinancing costs and ease the economic situation, although achieving this goal may lead to further sell-offs and capital outflows from US risk assets. The non-farm data is slightly weak, and this trend may continue under the pressure of the DOGE (government efficiency department).

• Returning to cryptocurrencies, the price rebound triggered by Trump's tweet was only a fleeting phenomenon. Pressure from the US stock market triggered a sharp reversal of the price from $95,000 a week ago to a low of $81-82,000. Subsequently, with the US stock market recovering from the bottom and the optimistic sentiment from the crypto summit on Friday, the price found support. On Thursday night, Trump signed an executive order to use the held Bitcoin for crypto reserves. Although this news suggests no further buying, it is at least a step in the right direction for Bitcoin (no mention of other tokens). After the market sentiment recovered on Friday evening, the price briefly touched the $90-91,000 resistance level, but continued to probe lower after the summit without any new news. In the low liquidity period on Sunday evening, Bitcoin was sold off below $80,000, Ethereum fell below $2,000, and Solana broke below $125.

BTC Implied Volatility

• Although implied volatility fluctuated quite violently during the week, it was essentially unchanged week-over-week. Implied volatility was squeezed higher ahead of the crypto summit, with overnight volatility pricing briefly reaching 5%. The very high actual volatility also supported the rise in implied volatility before the summit. However, after the summit without any new news and a very subdued price action, implied volatility was oversold, with the March 14 expiry implied volatility briefly selling off to 47, before spiking sharply after the Sunday sell-off in prices.

• Actual volatility remains in the high 50s to 60 range, at the highest levels recently, as the market is still seeking balance in the new range. Although we expect continued local volatility in the next few days, considering the cleaner positioning in the market now, we believe actual volatility will return to the mid-40s level in the latter part of the week.

BTC Skew/Kurtosis

• Short-dated expiry skew is biased to the downside. This is because the price action on the downside has been more violent than the upside (except for the Trump tweet). Further out the curve, skew turns positive from April/May, as the market is structurally unwilling to deploy positions on the downside.

• While kurtosis ended the week essentially unchanged, the intraweek changes were quite dramatic and highly correlated with price changes. However, as the price has remained in a local range and players have largely configured directional positions using call or put spread options, we can see the weight of the wings being pulled down, causing a temporary dip in kurtosis, but we suggest holding the wings for protection.