Key indicators: (November 25, 4pm -> December 2, 4pm Hong Kong time)
BTC/USD fell 2.4% (98,200->95,900 USD), ETH/USD rose 6.7% (3,410->3,640 USD)
BTC/USD ATM volatility at the end of the year (December) fell by 4.2 points (60.0->55.8), and the 25-day skewness remained unchanged at the end of the year (4.9->4.9)
Spot technical indicators at a glance
The price of the coin looks to have reached a local top. Despite continued strong buying from some well-known companies, the upward trend has failed to continue. This is roughly consistent with our view that the market has passed the main upward phase and is stabilizing here before the next wave.
Our base case is that any correction in the price of the coin will be relatively gentle. Given the strong support below, we may experience low realized volatility in the coming weeks. However, if the price breaks through $100,000 or $90,000, there will be greater volatility in the market, so be careful outside of this range. If the price breaks above $100,000, it will give us the opportunity to reach $110,000-115,000 earlier (earlier than our expected January-February next year). On the contrary, if the price falls below $90,000, $85,000 will be a reasonable support level, and the price may fluctuate violently below $76,000.
Market Theme
Last week was relatively quiet due to Thanksgiving. The SP 500 climbed to 6,000, while Treasury yields continued to slowly fall from their highs after Scott Bessant was confirmed as the next Treasury Secretary.
Bitcoin once again failed in its attempt to break through the $100,000 mark, triggering a pullback as low as $90,800, but it encountered strong support here. It gradually recovered to the mid-range level of $95,000-$6,000. Overall, the market is more balanced at current levels as the large purchases of MSTR are absorbed.
However, we continue to see impressive progress in other coins. The Ethereum ETF finally saw some decent inflows, causing spot Ethereum to briefly break through $3,700 against the US dollar (ETHUSD). Meanwhile, Ripple (XRP) also rose 50% this week.
ATM Implied Volatility
After a rather sharp correction to $90,800 and the subsequent upward correction to $97,000, the price of the coin showed signs of solidification for the first time, exerting downward pressure on both implied and realized volatility. Taking advantage of this opportunity, it is likely that many year-end positions have been cleared, and overall last weeks liquidation provided more selling pressure to the market.
As we approach the end of the year and the holiday season, we expect implied volatility to face further downward pressure and naturally develop a steeper term structure. However, we find that the market has already priced in quite extreme volatility for the period from the end of the year to January next year. If the price of the currency remains in a certain range during this period, this pricing will be difficult to maintain.
Skewness/Kurtosis
Skewness briefly corrected downwards, in line with the spot price’s pullback from $99,800 to $90,800, but that was short-lived, and Skewness recovered most of the downward correction during the rest of the week as the coin’s price showed strong support.
Overall, the kurtosis has gradually decreased this week, consistent with lower volatility levels, and is also affected by the continued wing call spread selling pressure. The market seems to expect the price of the currency to rise at a slower pace from now on.
Good luck to everyone in the coming week! 
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