What’s happening in the market?

BTC

After a ~15% decline over the weekend, $BTC has rebounded from its lows, spending this week in a range between $61,000 and $67,000.

Key Levels to Watch:

Support: $62,000, $60,700
Resistance: $67,000, $71,200

ETH

Similarly, despite bearish news flows, ETH has recovered from from its previous swing low of $2,850 before finding noticeable selling pressure $3,265.

Key Levels to Watch:

Support: $3,000, $2,900
Resistance: $3,300, $$3,500

SOL

Following a ~30% dump over the weekend, $SOL found a bottom around $120, catching bids all the way up to $155. Finding that area hard to break, SOL retested it’s previous swing low, before bouncing off of it again.

Key Levels to Watch:

Support: $125
Resistance: $155, $175

Options Market Update

BTC

BTC’s 7-day ATM IV hit a peak of 84.35 with the 30-day IV following closely at 74.33. This ~27% increase in volatility looks to be the result of escalating geopolitical tensions in the Middle East.

However, recent daily data shows a significant decrease in IV levels, indicating that traders may be starting to adjust to these geopolitical issues and incorporate them into their market expectations.

ETH

ETH’s 1W 25 delta skew hit a high of 21.51, possibly due to traders buying lots of short term puts. Despite the current fear, this high skew may suggest that the market has found its local bottom in the short term and might not fall further.

Interestingly, the last time its skew was this high in March, ETH rallied 20% off its lows.

In other news…

1. Paradigm reported key option flows for BTC and ETH last week.

Here are the top 3 structures for BTC:

• 300x 31-MAY-24 50000/80000 Bullish Risk Reversal (sold)

• 206x 28-JUN-24 70000/75000 Call Spread (sold)

• 200x 31-MAY-24 75000 Call (bought)

Here are the top 3 structures for ETH:

• 4000x 26-APR-24 3100 Call (sold)

• 3000x -1.00-Put-19-APR-24 2950/+1-Call-26-APR-24 3100 (bought)

• 2750x 19-APR-24 3000 Call (sold)

2. Hong Kong approves first bitcoin, ether spot ETFs

3. Solana Update Brings First Fixes for Congestion Issues

4. Bitcoin ‘halving’ will deal a US$10 billion blow to crypto miners

Trade Idea of the Week: 19APR-160/250 Long Call Spread

With SOL bouncing off its previous lows between $126 and $129, here’s a potential long volatility setup.

Our spotlight this week falls on the 19APR-$160/250 Call Spread option, currently trading at an IV of 146%.

SOL’s 7D skew is also closing in on its previous high of 12.5% and the last time it was this high, SOL rallied 20% within a day.

Potential Outcomes:

1. Best Case: SOL rallies above $250, making our call spread well in the money. Traders stand to make $90 per contract, excluding the net premium paid.

2. Moderate Case: If SOL fluctuates between $160 and $250, profit increases linearly with SOL’s price within this range but is limited by the cost of entering the spread (~$1).

3. Worst Case: If SOL drops below $160, both call options expire worthless. In this scenario, the loss is limited to the net premium paid for the spread, which is ~$1 per contract at time of writing.

Start trading: https://app.sdx.markets/trade
Join the conversation: https://t.me/sdx_markets