Key Indicators: (December 2 afternoon 4pm -> December 9 afternoon 4pm Hong Kong time)

• BTC against USD increased by 3.9% (95,900 -> 99,600 USD), ETH against USD increased by 7.4% (3,640 -> 3,910 USD)
• BTC against USD December (year-end) ATM volatility decreased by 0.6 points (55.8 -> 55.2), 25 d skewness decreased by 0.7 points (4.9 -> 4.2)

• Looking at the trend, the spot market is still making corrections to the price. Although the coin price has hit a new high above 100k USD, it has quickly and heavily fallen back. We believe that any upward movement will be sold off, but there will be a large market demand when it falls, so we expect a unilateral correction trend (the price movement will gradually flatten). The main resistance level is 99k USD-104k USD, and the support level starts from 94k USD, until it falls to 85k USD.
• Although the price will fluctuate in this range at first, we expect the actual volatility will eventually weaken (provided the price does not break through). If the price breaks through, 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 Theme:

Bitcoin finally broke through the psychological barrier of 100k USD last Thursday, triggering the price to explore 104k USD twice, both of which received good support. At first, it felt like this level was the answer the recent bull market trend was urgently hoping to see, 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, reaching as low as 90k USD. But it didn't last long, and the market regained 100k USD during the New York trading session and stabilized relatively in the range of 96-100k USD.

As the overall market sentiment remains bullish, other cryptocurrencies continue to rise. The price of ETH against USD has also risen above the psychological barrier of 4k USD, but is still 20% away from its historical high.

The price fluctuations in the traditional financial market are relatively calm. The implementation of martial law in South Korea caused a brief concern (which also led to a brief drop in Bitcoin to 93k USD), but was later proven to be just a local political turmoil and quickly subsided. China has again promised to provide stimulus policies next year to respond to the generally weak market since Trump's election and the promise of a new round of tariffs. Finally, US labor data continues to show signs of gradual weakening. Last week's non-farm employment report did not affect the Fed's gradual rate cut actions. Overall, we continue to believe that the macroeconomic background supports risky assets.

BTC ATM Implied Volatility:

• Overall, the market volatility was very high last week. First it dropped to 93k USD due to the martial law in South Korea, then broke through 100k USD and approached 104k USD, and then fell back due to liquidation, reaching a low of 90k USD. Although the volatility was so great, the high-frequency actual volatility was around 60 points, which was only the pricing of the average weekly implied volatility for the first quarter of next year!
• Therefore, most of the surge in implied volatility has subsided, especially for the expiration dates before the end of the year. Unless the price range of 90-104k USD is completely broken through, the actual volatility will be difficult 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 expiration (strike prices of 150-200k USD), causing the premium to rise after the January expiration. Again, considering the actual volatility as high as last week, the market will have difficulty maintaining such high implied volatility before the spot price breaks through significantly.

BTC Skewness/Kurtosis

• Although the spot market has experienced some rather violent corrections, the skewness price has been basically stable this week. The market's demand is still mainly concentrated on the upside of the price, and hedging on the downside of the coin price is one of the few demands.
• Accompanied by the fluctuation in actual volatility, the kurtosis has generally risen this week, which is also due to the market's demand for single-wing purchases (especially the upside wing).

Wishing you all the best for the coming week!