Last Week Recap
- FED continues QT, and with NFP coming in strong, it still has room for more aggressive rate hikes
- Nasdaq & SP500 give back almost their entire month open rally
- Celsius exposes transactions of its entire customer base
- BTC and ETH stayed compressed after being in the same range for over 30 days
- OpenSea CFO steps down after 11 months on the job
- Huobi is acquired by About Capital Management’s M&A Funds in Hong Kong
- BNB Chain suffered a $566 million hack last Thursday as 2M BNB was exploited from BSC Token Hub bridge
- With VIX trading over 30 almost the entire time last week shows there is a lot of worry in the market at the moment. With CPI coming up this week and FED speakers reassuring their path is still to get inflation down at any cost + them going through with actually tapering the balance sheet gives a bleak outlook forward.
- The Russia <> Ukraine conflict is also escalating, with energy prices soaring across Europe and the UK. Meanwhile, the EUR and GBP are getting pressured heavily by FED policies. It seems a given at this point that UK & Europe will fall into heavy recessions.
- If this week the VIX can break over 37 or under 28, this will finally give crypto its break from the tight range it has been in for the last month.
Open Interest & Funding Rates
OI on BTC increased quite a bit on the 3rd and 4th of October, which led to a small push in price. The actual price increase has almost been nullified, leading to the conclusion that those longs are slightly underwater/break even and still need to unwind.
BTC Weekly View
- Volatility is still compressed, as mentioned last week and in the previous VIX slide. Volatility will return sooner rather than later. Looking at other pairs, especially the ALT/BTC ratio, which seems to be breaking out or creating higher floors across the board + given the macro situation, the likely move seems to be gearing up toward the downside.
- BTC has also failed 3 weeks in a row now to close above the 2017 ATH. For a more sustained upside at this point, one must look for a break above the summer high.
ETH Weekly View
- ETH is structurally still above the summer range. But after the merge has also been seeing trouble gaining any momentum.
- In dollar valuation, ETH will likely follow BTC all, although with the BTC pair regaining some strength last week, the possible downside for ETH could be less than BTC ( See next part on ETH/BTC)
- ETH/BTC is gaining some strength at mid-range. This shows that ETH is gaining strength over BTC but can also be seen as a sign that people are guessing on a BTC breakdown on dollar denomination and are betting on the ALT/BTC ratio’s going higher. A lot of coins seem to be agreeing on this chart-wise.
TOTAL2 – USD Market Strength
- TOTAL2 is currently a reflection of ETH. Compressing entirely, when the tight range breaks, it will likely lead to a couple of trending weeks in whatever direction it goes. If to the upside, it makes sense to play the USD pairings. If to the downside, the BTC pairings make sense.
TOTAL2BTC – BTC Market Strength
TOTAL2/BTC is structuring out on 17’ and 21’ highs. This leads us to believe that the probability of a down move on BTC is higher. And the market seems to be following this sentiment by positioning in the BTC pairings strength.
Lowcap are still bleeding lower vs their highcap counterparts. With liquidity being scarce and centered across just a couple of coins at any given moment, we expect this to continue.
Note that if the USD pairings on BTC get strong at any given moment, the lowcaps will also see a fast inflood of liquidity again. With the size of most of these coins, they can move relatively fast.
*SH*TPERP/ALTPERP is a measure of speculative risk. When SH*TPERP outperforms ALTPERP, it shows a measure of speculation in the market, which shows how much risk people are willing to take at a certain time.
- CPI and FOMC minutes both this week.
- Earnings with JP Morgan releasing numbers on Friday (These will give some information on current economic condition)
- The market likely bleeding more as a slow-motion train wreck until inflation data improves, before that, it will be a trader’s market where high turnover will be focused on buying dips and selling rips
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 digital assets or other financial products.