Key metrics: (13Jan 4pm HK -> 20Jan 4pm HK):

· BTC/USD +14.8% ($93,500 -> $107,300) , ETH/USD +5.1% ($3,215-> $3,380)

BTC/USD Spot Technical Outlook:

· After finding strong support around $92k on several occasions, with a very brief blip below $90k that was quickly rejected, BTCUSD spot began the next wave of its ascent, climbing above $100k to end the week and gathering momentum ahead of inauguration, with a couple pullbacks towards $100k rejected and a large candle higher into Monday’s expiry to fresh ATH — just stalling ahead of the next psychological level of $110k

· From here on the technical picture we need a clean breakthrough of $110k to spark further upward momentum and reach our initial target of $115–120k. Otherwise, should the topside breakout be rejected, the market may have defined the extremes of the range ($90k downside, $110k topside) for now, which may indicate sideways choppy price action in the coming weeks

Market Themes:

· In macro markets, a soft PPI print on Tuesday set the stage for a slight miss in Wednesday’s CPI print, which eased the market’s main concern that the US data would prevent even a single rate cut from the FOMC this year. Bonds found some support on the back of this into the end of the week, setting the stage for a recovery rally in US equities off the lows and providing a tailwind for crypto to rally ahead of the inauguration

· The market was looking for an excuse anyway to buy crypto ahead of Trump’s inauguration, with rumours of ‘pro-crypto Executive orders’ floating about from the start of last week. With the more friendly macro backdrop above the market didn’t hold back, driving BTC up to $106k briefly on Friday night. What then ensued over the weekend in the space (need I mention $TRUMP…) was nothing out of the ordinary in normal circumstances, though potentially damaging to the medium term credibility of BTC under the Trump administration given the immediate wealth generation for the Trump team. While SOL was a short term beneficiary, ultimately BTC continues to outperform its peers, with the brief spike in ETHBTC on news of ‘Trump’s Liberty Financial acquiring 14,400 ETH’ quickly fading

BTC$ ATM implied vols:

· Event variance for the inauguration began to squeeze from midway through last week, initially pricing the daily vol around 80–82 vols (3.2% break-even) but then gradually squeezing higher to settle around 90 vols into the weekend. However with the aggressive 5% squeeze higher in a straight-line ahead of Monday’s expiry, the daily vol pushed up to around 110 vols for 21jan (4.5% break-even), which is hard to argue much against given it did that break-even ahead of the event in a short period of time

· Further out the curve, vol-of-vol remains quite elevated especially in Feb-Mar expiries, where there seems to be a lot of two-way flow that is driving the curve up/down 2 vol points in a short space of time. Overall implied levels are settling around 60 for those expiries which still seems on the high side given base-line realised has been closer to 45 until the events of the last 72 hours; however the market is likely pricing in some term premium into the curve given the background uncertainty over the Trump administration’s plans for crypto

BTC$ Skew/Convexity:

· Skew prices were generally better bid for calls this week as spot rejected the flush below $90k and reclaimed $100k. The most noticeable demand for topside was in gamma expiries covering the inauguration given the potential upside tail of strategic reserve announcement/executive order. However, further out the curves, the skew price action was more muted with the market not looking to roll up existing call spreads or add to outright topside, which suggests the market is already heavily deployed from December flows and looking for a break towards $120k to actually roll up existing structures

· Convexity was fairly muted outside of the inauguration tail demand in gamma tenors, with fresh topside plays executed via call spreads or call flies, net supplying the market with flies. However given the high realised vol-of-vol regime we are in and given that we have defined a range of $90–110k locally, we think there is value in being short strikes within this range against long strikes outside

Good luck for the week ahead!