[Weekly Brief] Jan 2026 - W3: Vol Compression & Regime Shift

As we approach Martin Luther King Jr. Day (Monday, Jan 19), we are observing a severe crush in Implied Volatility alongside realized volatility due to the upcoming U.S. market holiday.

Crucially, the Spot-Vol correlation has officially flipped to negative (-0.42), marking a complete return to the traditional "Risk-On = Vol-Down" regime. We are preparing for a potential decoupling where price stability or a slow grind-up will likely crush volatility further.

Performance Summary

• Period: Jan 10, 2026 (Sat) ~ Jan 16, 2026 (Fri)
• Duration: 7 Days
• OKX Return (Left): +4.86%
• Bybit Return (Right): +4.98%
• Total Portfolio Return: +4.91% (vs BTC +3.95%)
• Weekly Alpha (vs BTC spot): +0.96%
• Cumulative Return: +14.88% (vs BTC +2.57%, since Nov 29, 2025)
• Cumulative Alpha: +12.31% (vs BTC spot)

Alpha Analysis

• Profit Contribution: Options strategies continued to dominate performance, contributing 98.4% of realized gains, with Perpetual Futures playing a supporting role.
• Strategy Robustness: The market entered a distinct phase of volatility compression (Vol 1M: 39% → 36%). Our system successfully pivoted from capturing skew inefficiencies to monetizing structural market edge, delivering consistent alpha even as the spot rally normalized.

Market Context: "The Great Normalization"

• Spot-Vol Correlation (-0.42): The 1-week correlation has sharply reversed from positive to -0.42. This confirms that the "Panic Buying" phase is over. The market has returned to a more stable and predictable structure.
• Implication: With OTM Puts (90% Moneyness) showing a strong inverse correlation of -0.83, the structural stability of the market has significantly improved.

The Process

• System Evolution: We deployed the 'Dual Boost Logic' for weekly option openings. This algorithm optimizes entry precision during the weekly contract rollover, enhancing yield capture.
• Infrastructure Upgrade: We successfully migrated our core trading server from Naver Cloud to AWS Lightsail for lower latency. Additionally, we implemented a data tiering architecture using AWS S3, ensuring efficient storage management by keeping active 'hot data' in MongoDB and archiving historical 'cold data' to S3.

About the Report

1. Philosophy: Gauss Technology does not rely on directional prediction or speculation. We focus strictly on monetizing market inefficiencies and structural volatility.
2. Instruments: BTC spot, perpetual, and options on Major Crypto Exchanges (OKX, Bybit).
3. Data Standards: All performance metrics represent Net Realized PnL, calculated after deducting all fees and slippage. The PnL charts displayed are actual screenshots taken directly from the exchange apps. Please note the time basis for daily snapshots varies by exchange: OKX data is recorded at UTC 08:00, and Bybit data at UTC 00:00.
4. Membership: This public report displays percentage returns only. Absolute pnl ($) and detailed execution analysis will be available exclusively in the upcoming Partner Tier.
5. Evolution with AI: Decisions are driven by Human-AI collaboration. Therefore, as AI advance, Gauss Technology’s capabilities grow stronger.
6. Disclaimer: This report is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results.