Kairon Labs - Leading Crypto Market Maker (Market Update) January 23, 2023

Crypto Macro Market Update – January 23, 2023

Last Week Summary

  • Crypto Lending Firm Genesis files for bankruptcy.
  • SBNY (Signature bank) restricts crypto deposits to Binance under $100k via SWIFT.
  • The US DOJ announced the“International Cryptocurrency Enforcement Action”, and seized Bitzlato, a Hong Kong-based, Russian-owned crypto exchange.
  • NEXO reached a settlement with SEC by paying a $45M fine and stopping Earn products.
  • Robinhood launched a self-custody crypto wallet.
  • Circle to launch Cross-Chain Transfer Protocol which can burn USDC on the source chain and mint USDC on the destination chain.

Legacy Markets – VIX

VIX is still sub-21. With the earning season coming up, and FOMC in February it’ll probably have good support coming week as people hedge out some exposure. The geopolitical situation is also heating up in the news flow again, which is also something to keep an eye on as the market has become pretty complacent towards it.

Legacy Markets – DXY

The DXY is still grinding in our multi-month support. The possibility of reversal here is still quite high. With the vicious rally in crypto and equities stalling out, we think this will happen sooner rather than later, so a possible risk-off scenario should definitely be on the radar.

BTC Weekly View

BTC shot straight up into our first resistance zone without any retests or meaningful consolidations on higher time frames. With FOMC coming up, we think the market & crypto is positioned for a sell-the-news event on FOMC if the FED goes for 25BPS with dovish news. Anything higher than 50BPS, and hawkish would cause a major impact. Expect the market to get a lot choppy here and have a grinding price action. We think most of the “Clean Impulse” move is done here.

ETH Weekly View

ETH shows the same picture as BTC. Running into the first real resistance/stalling zone. With the impulse move being clean into it ETH will also likely start giving chop-like price action. Currently, the market will be on the lookout for FOMC,  and as mentioned in the VIX post – keep an eye out for deteriorating geopolitical news.

ETH/BTC

ETH/BTC has been surprisingly weak, with no leading strength.  This, in our opinion – is not ideal, as dips in BTC will now lead to outsized corrections on ETH because of the relative strength loss.

TOTAL2 – USD Market Strength

TOTAL2 is still grinding our resistance trendline. With ETH and BTC slowing down, we’ve seen money trickle down to alt. The initial strong ones were OP, LDO, and APT as mentioned last week. With these all being somewhat extended, second-tier alts have also been popping the previous week, and over the weekend. We’d still warrant a cautious eye this week as we haven’t really had any sizeable pullback. If we get one alt, we could get quite the flush.

TOTAL2BTC – BTC Market Strength

TOTAL2/BTC had further weakness on the BTC up move. As mentioned last week, only a select few alts are really outperforming, with the rest showing grinding-like price action up, and retracing fully on the slightest sign of weakness in BTC.

Summary

  • FED is in blackout week so they won’t be speaking before the FOMC event next week.
  • Big earnings are to be expected, with MSFT and TSLA both announced this week.
  • Crypto options space: 
    • ETH 60d R/R (P-C) having trended lower into bullish territory over the month on improving sentiment has since retraced in neutral territory. 
    • ETH 60d ATM vol which moved sharply higher mid-month has also since moderately retraced. 
    • Our prop long ETH straddle transformed into a bear put spread position on long call leg pnl target closeout & short put leg executed at elevated mid-month IV continues to be profitable.
    • News flow around the geopolitical situation is heating up again. The market seems pretty complacent around this news at the moment so it’s definitely something to keep an eye on as possible risk events.

 

DISCLAIMER:
The information in this report is for information purposes only and is not to be construed as investment or financial advice.  All information contained herein is not a solicitation or recommendation to buy or sell any digital assets or other financial products.

Leave a Comment

Your email address will not be published.