BTCVolatility weekly review (February 10th-17th)

February 17th, 4 pm Hong Kong time ( BTC fell 1.4% against USD, from 97.5 thousand US dollars to 96.15 thousand US dollars). ETH rose 1.9% against USD, from 2.64 thousand US dollars to 2.69 thousand US dollars( Spot technical indicator overview:

The market has been very quiet this week, trading within a narrow range (derived from the initial wedge pattern). The support level has been firmly maintained below $95.75K, extending all the way to $94-95K; while selling has been consistently seen above $98K. Considering the strong support below, we still believe that the price will continue to move within the current range in the next few trading days. However, as the actual volatility continues to decline significantly, the implied volatility may take some time to move to the level of over 40. Currently, the resistance is between $98-99K, higher above $100K; if the lower range of $94-95.7K is breached, stronger support will appear at $89-91K. In the medium term, we still maintain an optimistic attitude towards Bitcoin, expecting it to trade in the range of 120-130 thousand US dollars. However, the expected timing will be delayed until later this year. Market Themes Overall, the macro market was relatively calm this week. Although CPI and PPI slightly exceeded expectations. The market seems to have found a balance on the Fed's interest rate cuts/hikes. Sensitivity to Trump's tariff news is gradually decreasing (the market reacted moderately to this week's 'tit-for-tat tariff' news). Cryptocurrencies performed flat again, with Bitcoin still holding steady in the $94-99k range. After a strong CPI index release, the price rebounded from the bottom of the range, indicating strong support at that level, but quickly retraced after spiking to $98k. Ethereum also remained in the $2.55-2.85k range, with more significant fluctuations locally. Other altcoins had mixed movements, with SOL seeing a large sell-off before the supply lock-up in early March. Cryptocurrency expert Sachs brought optimism to the market on Friday, claiming that cryptocurrencies are about to see very positive developments. The initial deadline for the first draft of the cryptocurrency working group's terms is this Friday, the 22nd, so we expect to see market excitement about some news or rumors later this week. However, overall, the market seems reluctant to chase higher without more substantial catalysts. BTC ATM implied volatility

This week, the implied volatility level has slightly decreased in the consolidation and gradually found support, as its absolute level is visibly higher than the previously visible lows. However, this conceals the rather steep term structure fact. As low-volatility trading days gradually expire, the expiration dates of forward contracts should rise gradually. In fact, they have not risen (consolidated or decreased), essentially indicating a gradual decline in the volatility of distant dates. Combined with the recent low actual volatility, it indicates that the cost of holding long forward positions is quite high. If the coin price continues to stay within 94–100 thousand US dollars, we expect the ATM implied volatility to continue to decrease. Coupled with the quite steep term structure, we believe the optimal trading strategy is to partially hold short positions expiring in March. Meanwhile, holding out-of-the-money call options in the short term can provide sufficient protection in case of a price breakout. BTC skewness/kurtosis

As multiple attempts to break through the strong support level of $94-95k failed, the skew gradually shifted upwards this week. This is also due to the market being quite cautious about holding short positions outside this range, considering the current low levels of implied volatility and the potential rapid increase in actual and implied volatility once the price breaks out in either direction. Kurtosis has been relatively quiet outside the short term this week. The continually shrinking price range confirms a low demand for local strike prices between $95-100k, while the low volatility levels make holding short positions outside this range very cautious. Wish everyone good luck in trading this week/this month!