Key indicators (February 17, 4pm -> February 24, 4pm Hong Kong time)
BTC/USD fell 0.3% ($96,150->$95,900), ETH/USD rose 1.3% ($2,690->$2,725)
BTC to USD spot technical indicators at a glance
After a week of low volatility, the spot market successfully absorbed the sell orders at the top of the price action channel and began to test the resistance level of $99-100k on Friday. But then the news of Bybit hacking came out, everyone withdrew their margins, and a large amount of selling pressure triggered a round of liquidation. The market then withstood the impact of the $95k support level and gradually pulled back to the top of the previous price action channel.
From here, the next few trading days will determine whether the market is willing to return to the original trend channel and form a new stable pattern; or successfully break out of the trend channel, then we are likely to see substantial growth in the price of the coin and witness another impact on $100k. On the downside, if the support level of $95k is lost, the market will most likely hit the $93k point first, followed by the resistance level of $90-91k, which has been held for a long time. If the resistance level of $90-91k is also lost, we may see a longer downward correction in the price of the coin.
Market Theme
It was another quiet week for the macro market. The market was fairly stable until Friday when weak US economic growth data and lingering inflation expectations triggered a new stagflation panic, causing US stocks to fall while bond yields also fell due to traditional risk-off psychology. However, overall, the macro backdrop remains stable and short-term position adjustments seem a bit exaggerated in the current very low volatility environment.
The cryptocurrency market is still looking for a new narrative, especially the small-coin market, which is quite weak. The news that MSTR raised funds to buy more Bitcoin boosted the market in the middle of the week, and Bitcoin briefly moved towards the key point of $100,000 on Friday. But then the news that Bybit was hacked and stolen $1.5 billion worth of ETH disrupted the market, and a large number of long stops on Bybit triggered liquidations. This week ended with Ethereum falling 6% and Bitcoin returning to $95,000.
BTC Implied Volatility
Implied volatility has been subdued this week, especially in February-March expiration. Theta consumption and rolling down of implied volatility across the steep maturity curve has led to capitulation of bullish volatility positions. Realized volatility has been locked in the 30s recently, pushing down the daily implied volatility to 35-36. This is the lowest level since October before the election last year. We do not expect local realized volatility to rise significantly while the price remains in the range of $94-99k. This should keep pressure on short-term implied volatility.
In terms of the ATM term structure, the market appears to continue to extract a premium for further out (less gamma-influenced) maturities. While we believe there is a premium on the term curve, there is a high probability that the curve will continue to steepen before longs capitulate on June and beyond maturities.
BTC Skewness/Kurtosis
After the Bybit hack, the skewness of the short-term period fell sharply. Although the news did not cause a sharp drop in the price, we expect the skewness to remain at the current level for a while. The skewness of the long-term structure remains stable and tilted upwards, as there is still a tail risk of hoarding cryptocurrencies and deregulation in the United States.
Kurtosis is quite silent in expiration dates outside the short term. Prices on the short-term upper wing briefly moved higher after the Bybit news, but it was short-lived.
Good luck to everyone this week/month!
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