Market Performance Overview
Bitcoin (BTC) against the US Dollar rose by 1.5% this week, climbing from approximately $82.3k to $83.5k. In contrast, Ethereum (ETH) experienced a decline of 8.2%, moving from around $2.07k to $1.9k.
Bitcoin's spot price saw continued declines early in the week. However, as prices stabilized within the $80k–$85k range, realized volatility began to decrease. Last week's price action established a recent low, prompting close market observation for signals of the next major move—whether upward or downward.
Given the extended period of high volatility, a phase of consolidation and stabilization is expected. In the coming week, support is anticipated near the $78k–$80k range, with immediate resistance around $85k–$86k. Further resistance lies at $89.5k–$92k.
A break below $78k–$80k could reignite high volatility. Conversely, surpassing $92k may set the stage to test the significant long-term resistance zone of $98k–$100k. While the medium-term outlook for Bitcoin remains optimistic, more confirmation is needed to signal the end of the current correction phase.
Broader Market Context
It was another week of notable volatility. The S&P 500 hit new lows amid ongoing fund deleveraging and long-short positioning adjustments. Widespread speculation about significant multi-asset mean reversion emerged, though no new narrative substantiated these moves.
Markets are growing desensitized to back-and-forth tariff policies. Ultimately, this appears to be a long-overdue correction and deleveraging cycle, a risk that had been optimistically overlooked. Structurally, volatility is becoming more evident in this cycle, and the VIX is unlikely to remain in the teens over the coming months—though intermittent calm periods will occur.
In crypto markets, Bitcoin dipped below $80k multiple times, continuing to flush out excess leverage. Meanwhile, Ethereum fell below the key $2k support level and struggled to regain upward momentum. Bitcoin outperformed the S&P 500 and Nasdaq on a weekly basis, showing resilience during Asian trading hours after pressure in New York sessions.
Overall, positioning across asset classes is now cleaner. The high cross-asset correlations observed recently are unlikely to persist. A substantial drop in the S&P 500 would likely be necessary for Bitcoin to set new lows.
BTC Implied Volatility Analysis
Implied volatility for Bitcoin spiked early in the week during New York trading hours, following a drop in the S&P 500 and a surge in equity implied volatility. However, it declined significantly thereafter. Realized volatility also decreased, dropping below 50% to the low 40s for the first time in weeks.
The decrease in implied volatility was more pronounced in short-dated expiries, with modest declines in longer-term tenors. Selling pressure was noted around June expiries as medium-term participants unwound structural long volatility positions.
Current conditions suggest continued stabilization as markets await new catalysts. Realized volatility is expected to remain relatively subdued. The April 4 expiry is gaining attention due to anticipated tariff announcements on April 2, with elevated premiums already priced into equity and forex volatility surfaces.
Skew and Kurtosis Trends
Skew in short-dated expiries recovered from a strong downward bias early in the week. With cleaner positioning below the market after the Sunday-Monday liquidation flush, fewer positions are vulnerable to cascading sells on a pullback.
Longer-dated tenors saw relatively stable skew pricing, as structural players show little interest in downside protection at current levels. Kurtosis ended the week largely unchanged but experienced intraweek swings alongside implied volatility fluctuations.
While long kurtosis positions remain attractive, shorter-dated positions may suffer from theta decay in a range-bound market. Therefore, holding long kurtosis in longer tenors is preferred, betting on a narrative shift that could break the post-election trading range of $70k–$105k.
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Frequently Asked Questions
What caused Bitcoin's volatility to decrease this week?
Bitcoin's volatility declined as prices stabilized within the $80k–$85k range. Market participants reduced leveraged positions, leading to cleaner order books and less aggressive trading.
How does traditional market volatility affect Bitcoin?
Traditional market volatility, especially in the S&P 500, can spill over into crypto markets. Sharp moves in equities often lead to short-term spikes in Bitcoin's implied volatility, as seen this week.
What are support and resistance levels for Bitcoin?
Current support is near $78k–$80k, with resistance at $85k–$86k and $89.5k–$92k. A break above $92k could test the $98k–$100k zone.
Why did Ethereum underperform Bitcoin this week?
Ethereum broke below key support at $2k and failed to recover momentum. This underperformance reflects weaker sentiment and larger liquidations in altcoin markets.
What is the outlook for Bitcoin volatility?
Volatility is expected to stabilize in the short term unless new catalysts emerge. The market is watching upcoming events, such as policy announcements, for potential volatility triggers.
How can traders manage risk in current conditions?
Traders should focus on longer-dated options to avoid theta decay and consider strategies that benefit from breakout moves, such as long kurtosis positions.
Good luck with your trading this week!