Key indicators: (April 14, 4pm -> April 21, 4pm Hong Kong time)
BTC/USD rose 3.6% ($84,450->$87,500), ETH/USD fell 1.9% ($1,620->$1,590)
Another week has passed since the market dropped to the $75k turning point after the election. This week, the price has remained well above $80-81.5k, further confirming that this double bottom price is strong support. Our base case is that the price will remain on the high side of the $81-90k range for the next few trading days and weeks. If the price breaks through $91-92k, the market will try to break through $100k and then set new highs again. If the price instead falls below $73-73k, we will see the price actually fall to $60-65k.
We remain bullish in the medium term and believe that the price of the currency will reach new highs in the next few quarters, with a technical target of between $115,000 and $125,000. However, the specific path and time are still elusive.
Market Theme
Overall, markets have been calmer this week after a massive rebalancing and deleveraging, while most of the “bad news” related to tariffs has been released (including the latest announcement of restrictions on chip exports to China). Powell’s cautious attitude towards rate cuts in his speech, noting the risk of higher inflation, was not well received by the market or Trump. Then there were reports over the weekend that Trump said he was “trying to remove Powell from his position”, which triggered a new round of dollar selling on the Monday after Easter, and the credibility of US assets continued to be damaged by Trump. The VIX index continues to remain above 30 as the market remains very worried that Trump and his administration will bring more unexpected news.
Back to cryptocurrencies, Bitcoin broke its correlation with the SP or US stocks for the first time since late February, ignoring the weak stock market and the rise in the VIX index. It was more affected by the weak US dollar and rose in sync with gold and G10 foreign exchange. At the same time, other small coins found it difficult to rise in a weak stock market environment. So Bitcoins performance that exceeded expectations is more to diversify away from the single US dollar and related assets. If it continues to develop in this trend, Bitcoin should have room to rise sharply to catch up with the gains of gold this year. We still insist that in the current environment, Bitcoin can only truly enter the next stage after breaking the correlation with US stocks.
BTC Implied Volatility
Implied volatility also fell sharply after realized volatility jumped lower. Realized volatility was locked in the 30s for most of last week as positions in the market became clearer and the price of the coin found equilibrium in a very narrow range of $83-85k. Implied volatility fell sharply before the Easter holiday as the market sold off, and then naturally corrected as the weekend ended and the price of the coin showed an upward trend.
While other markets remain more volatile than ever, Bitcoin is beginning to de-correlate with other assets, especially the SP. If this continues, it will further affect the long end of the term curve and lead to lower volatility in Bitcoin. This is critical for Bitcoin as a diversified alternative to the US dollar and its assets.
BTC Skewness/Kurtosis
The price of short-term skewness has gradually returned to flat from the extreme downward skew, which is consistent with the rise in the price of the currency on Monday and the increase in realized volatility. But in general, the market is more comfortable around the current point, because although the implied volatility has risen by 5% on the expiration date within one day, the further end has not been greatly affected, suggesting that the market has long positions in the current price area, and we also see some long-term players re-arranging covered call positions when the price of the currency rises.
With implied volatility pricing lower and sellers on both sides of the coin stabilizing in the technical range of $82-90k, the kurtosis is largely suppressed. However, if the range breaks, we expect to see a sharp rise in realized volatility (and implied volatility), so in the current environment, considering the technical indicators of spot, and the correlation between very high realized volatility fluctuations, skewness and spot, we still recommend holding a wing position.
Good luck to everyone this week!
You can use the SignalPlus trading vane function for free at t.signalplus.com/news , which integrates market information through AI and makes market sentiment clear at a glance. If you want to receive our updates in real time, please follow our Twitter account @SignalPlusCN, or join our WeChat group (add the assistant WeChat, please delete the space between English and numbers: SignalPlus 123), Telegram group and Discord community to communicate and interact with more friends.
SignalPlus Official Website: https://www.signalplus.com
