The past week in the cryptocurrency markets has been marked by consolidation, shifting volatility patterns, and increasing cross-asset awareness. Bitcoin (BTC) showed resilience despite broader macro headwinds, while Ethereum (ETH) faced downward pressure. As market participants recalibrate positions, understanding the evolving dynamics of implied and realized volatility becomes crucial for navigating the weeks ahead.
BTC Price Movement and Key Levels
Bitcoin appreciated by 1.5% over the week, rising from $82,300 to $83,500, while Ethereum declined 8.2%, dropping from $2,070 to $1,900. Despite short-term fluctuations, BTC has stabilized within the $80,000–$85,000 range, signaling a potential shift from high to moderate volatility.
This stabilization follows a recent dip to a local low, which triggered intense market scrutiny. Traders are now assessing whether the next major move will be upward or downward. Given the extended period of elevated volatility, a phase of adjustment and consolidation appears likely. Near-term support is expected between $78,000 and $80,000, with immediate resistance at $85,000–$86,000. A breakout above $92,000** could open the path toward more significant resistance levels at **$98,000–$100,000, which remain key psychological and technical barriers.
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A close below the $78,000–$80,000 support zone may reignite high volatility conditions, suggesting renewed selling pressure. Conversely, sustained strength above $92,000 would signal renewed bullish momentum and potentially attract institutional inflows. While we remain bullish on Bitcoin’s medium-term outlook, confirmation of a completed correction phase is still pending.
Macro Environment and Cross-Asset Correlations
Markets across asset classes experienced turbulence this week. The S&P 500 declined amid ongoing deleveraging and balanced positioning in equity funds. Although rumors circulated about significant drawdowns across multiple asset classes, no new fundamental narratives emerged to justify the sell-off. Investor fatigue around recurring tariff policy announcements has grown—what once moved markets now elicits indifference.
Structurally, however, volatility is re-emerging. The VIX (Volatility Index) is unlikely to remain in the teens for the coming months, despite occasional calm periods. This reflects a broader market repricing of risk after years of complacency. While equities corrected sharply early in the week, crypto assets—particularly Bitcoin—outperformed both the S&P 500 and Nasdaq indices over the full period.
Notably, Bitcoin briefly dipped below $80,000** multiple times during the week, leading to further liquidation of overstretched long positions. Meanwhile, Ethereum broke below the psychologically important **$2,000 level and failed to reclaim upward momentum afterward. Price action showed weakness during New York trading hours but found support and rebounded during Asian session hours—a pattern increasingly observed in recent cycles.
We believe current positioning across asset classes is now cleaner, reducing the likelihood of extreme cascading liquidations. Importantly, the historically high correlation between crypto and traditional risk assets may begin to decouple—Bitcoin may no longer automatically follow equity market downturns unless there is a severe macro shock.
Volatility Trends: Realized and Implied
One of the most notable developments this week was the decline in realized volatility. For the first time in several weeks, weekly realized volatility dropped below 50, settling in the low 40s. This suggests that price swings are becoming less extreme on a daily basis—a sign of stabilization.
Implied volatility also trended downward after spiking early in the week due to a drop in the S&P 500 during Monday’s New York session. That event briefly elevated implied volatility across both equities and Bitcoin options markets. However, as markets stabilized, implied volatility receded—especially in short-dated options.
The decline was more pronounced in near-term expiries, while longer-dated options saw only a modest reduction in implied volatility. This reflects continued uncertainty about medium-term catalysts. Notably, there was visible selling pressure at the June expiry, as intermediate-term traders reduced structural bullish positions.
Skew and Kurtosis: Positioning Insights
Market skew—the measure of demand for downside protection—normalized this week after sharply favoring bearish options last Sunday and Monday. With extensive liquidations clearing out weak long positions, there are fewer vulnerable trades that could trigger cascading sell-offs on the next dip.
As a result, downside hedges are less in demand, and skew has returned closer to neutral in short-dated options. In contrast, skew in longer-dated options remains relatively stable, indicating that structural investors are not significantly increasing bearish bets—they continue to hold a constructive long-term view on Bitcoin.
Kurtosis—a measure of tail risk or the likelihood of extreme price moves—ended the week largely unchanged. However, it fluctuated significantly during the week alongside shifts in implied volatility. While we still see value in holding long kurtosis positions as insurance against unexpected macro shocks or black swan events, short-term theta decay (time decay) may erode profits if prices remain range-bound.
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Therefore, we recommend focusing on long kurtosis exposure in longer-dated options, particularly as we approach potential market-moving events later in Q2 2025.
Forward-Looking Catalysts
Markets are currently in a holding pattern, awaiting new catalysts. One such event looms on April 4—the expiry date that may reflect positioning changes following tariff announcements expected from Trump on April 2. Already, elevated premiums are visible in S&P 500 and FX volatility curves ahead of this date.
If these policies introduce fresh trade tensions or inflationary pressures, they could reignite volatility across asset classes—including cryptocurrencies. Bitcoin’s reaction will depend on whether it's perceived as a hedge (positive move) or a risk asset (negative move).
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Frequently Asked Questions
Q: What caused Bitcoin’s price stabilization this week?
A: After testing lows near $78K–$80K, Bitcoin found support and entered a consolidation phase within the $80K–$85K range. Reduced macro panic and cleaner market positioning contributed to lower realized volatility and price stability.
Q: Why did Ethereum underperform Bitcoin?
A: ETH broke below the key $2,000 support level and failed to regain momentum due to weaker investor sentiment and fewer near-term upgrade catalysts compared to BTC. Its higher sensitivity to DeFi activity also weighed on performance.
Q: Is low volatility likely to continue?
A: Yes—short-term volatility is expected to remain subdued as markets digest recent moves. However, upcoming macro events (e.g., tariff announcements) could reignite volatility after April 2.
Q: How does skew affect options trading?
A: Skew indicates whether puts or calls are more expensive. A shift toward neutral skew suggests balanced sentiment—useful for identifying potential breakout opportunities without excessive hedging costs.
Q: Should I trade short-term or long-term options now?
A: With low short-term volatility and theta decay working against near-dated options, longer-dated contracts offer better value—especially for positioning ahead of potential Q2 catalysts.
Q: Can Bitcoin decouple from stock markets?
A: Evidence suggests increasing divergence. While past corrections saw strong correlation with equities, recent performance shows Bitcoin can stabilize or rally independently—particularly if macro fears subside.
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