Key indicators: (June 30, 4pm -> July 7, 4pm Hong Kong time)
BTC/USD rose 1.1% ($107.6k -> $108.8k), ETH/USD rose 4% ($2,480 -> $2,580)
The price of the coin continues to hover below its all-time high, and each attempt to break through immediately encounters strong resistance. We expect the market to break through the all-time high in the coming weeks, but there is still a certain risk of falling back below $100k. If we fail to break through, we may see the price of the coin continue to correct downward to $93-94k, but it still does not affect our long-term bullish view. If we successfully break through $113k, it may quickly rise to $120k and finally $125-135k.
Market Theme
With the US holiday season and summer break in full swing, we had another quiet week. US non-farm payrolls were surprisingly strong again, dampening hopes of an early rate cut in July and the possibility of a stronger risk appetite in the summer. Concerns about the July 9 tariff deadline led to a brief pullback in risk assets in a low liquidity environment ahead of the weekend, but overall it felt like the market was not heavily positioned or leveraged.
Risk sentiment returned to the cryptocurrency market at the beginning of last week. Bitcoin briefly touched over $110k, but we ultimately stalled just short of our all-time high. Bitcoin fell along with the US stock market as US economic data broke expectations of an early rate cut, and concerns about tariffs also caused the price to fall back to $108k. Locally, the correlation between Bitcoin and US stocks/other risk assets remains high, but it feels like the market is still waiting for a real catalyst to push the price up to a new all-time high - the US Congress pre-announced July 14 as Crypto week, and will push crypto-related bills (mainly involving stablecoins) that week. Perhaps this will be the trigger for the market to gain enough momentum to break through the high point.
BTC ATM Implied Volatility
Realized volatility was pretty low last week, another week below 30 pips (including two weekend days with almost 0 realized volatility). The price is still comfortably in the $105-115k range, and near-term catalysts are almost nowhere to be found. However, such low implied volatility is now starting to attract buyers for low-priced options (buy below to protect long spot positions, or buy call spreads above to extend the bullish leverage to prepare for an eventual breakout) - these trades are currently holding up the bottom of implied volatility well.
The current term structure is not steep (compared to historical levels), and the market has fully harvested the remaining term premium. Considering the characteristics of Bitcoin, it is easy to return to the high volatility range when the price breaks out of the range. Having long Vega on the long term and selling short term as funding (steep short-term curve, fast decline in term) looks like a very attractive position.
BTC Skewness/Kurtosis
The skewness moved sharply downwards before the weekend, as the market was worried about the additional negative impact of Trumps tariff news, and the failure of the upward breakthrough of $110k led to a downward spike. The skewness tilted downwards due to the demand for hedging downside risks and the low volatility. In the absence of further declines over the weekend, the skewness recovered quickly. At the same time, the demand in the long-term market was only above the coin price, so the forward skewness was more stable.
Kurtosis has increased over the last week as local implied volatility continues to fall and the market has started to buy points outside the price range to capture price breakout opportunities. However, at the far end of the term, kurtosis is still at a low level, and there is still an opportunity to buy kurtosis in preparation for price breakouts and volatility patterns returning to high levels.
Good luck to everyone this week!
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