BTC Volatility Weekly Review (November 17 - December 1)

Key Indicators (November 17, 4 PM HKT to December 1, 4 PM HKT) $86,400(ETH/USD: -11.9% )$3,200 Market Theme The market has been extremely volatile in the past few weeks due to the FOMC's rate pricing swinging from a 90% probability of a rate cut in December down to 30%, and then back to 90%. High-beta tech/AI stocks and cryptocurrencies have been the most affected, while the VIX index briefly revisited the 25-26 highs seen several times this year (excluding the >40 highs caused by tariff issues in March-April). Although the VIX level again limited further price increases, the overall macro fundamental backdrop remains favorable for risk assets as there have been no substantial changes to the Fed's rate path. The market can no longer sustain a risk-off stance long-term, as positions have already been reduced before Thanksgiving, and we have seen a general rebound in risk assets. Following the decline in high-beta risk assets, cryptocurrencies were not spared from the continuation of the downturn, with BTC breaking below the crucial support of $85,000 two Fridays ago, triggering a swift drop to test the strong support at $80,000. Since then, we have seen a corrective rebound amid thin liquidity and exhausted sell-offs, with overall risk sentiment improving as the market attempts to find a bottom. Unfortunately, following the events of October 10-11, market sentiment/structure seems to have been fundamentally weakened, suggesting that this cycle “may be different,” as the willingness to buy and new liquidity may not be sufficient to drive prices significantly higher and break through $100,000. Outflows from IBIT have increased, but are far from the scale of sustained inflows we saw over the months since summer, and the trend of its funding flow will be a key to monitor in the future. Interestingly, the performance of altcoins has been relatively strong, which is highly unusual in a cryptocurrency “bear market,” indicating a deeper degree of deleveraging (again related to the impact of the events on October 10-11), and positions in altcoins are generally much cleaner (except for DAT holdings, although Tom Lee has not slowed down his purchases of ETH… at least for now!). BTC implied volatility

The implied volatility range has been very large over the past two weeks. The volatility of contracts with a maturity of less than 2 months surged when the price of the coin hit a low of $80,000, then sharply dropped due to last week's slow correction after the low volatility increase. It then rose again with a new round of selling starting from $90.5K to $85.5K during the Asian session. The actual volatility has remained high at around 48–52%, so the decline in implied volatility can only be attributed to position reductions before the end of the year, while market makers hope to recover the selling flow from directional trades. The term structure of implied volatility has generally flattened, as some long-term volatility selling pressure has made maturities longer than 3 months appear slightly heavy, while short-term contracts continue to be supported due to the increase in actual volatility. BTC Skewness/Kurtosis

Wishing you successful trading next week!