Last Week Recap
- Macro pressure relief with DXY and VIX both dropping.
- Tesla sold 75% of its BTC holdings.
- ECB starts rate hikes.
- Ethereum Outpaces Bitcoin, Bitcoin grew 8% over the last seven days while Ethereum blew up 27% after the ETH merge news
- Stablecoin Provider Circle Eyes Public Listing in Q4 This Year
- Polygon announces Polygon zkEVM and open-sourcing the code for Polygon zkEVM
- KuCoin exchange CEO denies rumors that it’s insolvent.
- KuCoin also announced that it has secured a $10 million strategic investment from Susquehanna International Group (SIG)
- Uniswap To Integrate Sudoswap To Access Deeper NFT Liquidity
VIX is approaching the trendline where tighter monetary policies started. Every time since November, this has been a major risk-off signal. Given the relief rallies that have been in markets and with FOMC and AAPL & AMZN earnings this week, caution is warranted.
Open Interest & Funding Rates
There’s a fairly large build-up of OI in the 18-24k price zone. Around 2B has been build up. With markets seeing lower liquidity across the board due to the giant deleveraging, the liquidation effect from this build-up can make disproportionate volatile moves. Especially after the relief rally markets have seen and with several risk factors this week + hedging is cheap at the moment (Low VIX, this means not many entities are well positioned for downside).
BTC Weekly View
From the current structure, it’s fairly obvious BTC is just ranging. With macro conditions still not optimal and the FED still pulling liquidity out of the market, BTC has a likely chance to range for quite some time. The real trend at the moment is in ETH, which is pretty apparent looking at the impulse ETH had from the bottom and the ETH/BTC ratio strength (see next slides).
ETH Weekly View
- ETH, at the moment, is the driver of the market. With the Goerli testnet upgrade in early August, it’s in the final quarter for the merge. It’s important to note how strong the impulse on ETH was relative to the rest of the market.
- Most coins and NFTs have started bleeding in ETH valuations because of the strong push ETH had.
- With the current push being a bit extended in the short term and with risk factors mentioned in previous slides, ETH probably is looking at a retest of 2017 ATH. In the ideal scenario, this holds, and it doesn’t drop back in the 2017 price structure
After the massive outperformance of ETHBTC the last couple of weeks, it’s finally taking a breather. If the Goerli testnet merge is successful, ETH will most likely keep outperforming in the short term relative to the market. Till Goerli, the ratio is most likely range bound with a slow bleed in the dollar market because of the macro environment (see previous slides).
TOTAL2 – USD Market Strength
Last week we mentioned of TOTAL2 probably retesting the red box around the 620B market cap. This now played out fairly well, and the slowdown in the whole market since is apparent. With several risk events this week, further consolidation/bleed is expected depending on what kind of information the market gets this week from said events.
TOTAL2BTC – BTC Market Strength
Our view is still that the strength in the market is in playing the BTC pairings while BTC is trading at low dollar valuations. TOTAL2BTC is seeing the same slowdown ETHBTC is seeing. If just like ETHBTC, TOTAL2BTC can consolidate in the current price range and thrust further upwards after this week’s risk events, we could see new ATHs on TOTAL2BTC for the first time since 2017!
SH*TPERP/ALTPERP is also showing signs of weakness as soon as ETH started slowing down. This shows market participants are still highly aware of any weakness in the market and have no problem selling their coins to keep themselves protected at this point.
- ALTBTC is where the market strength still is.
- FOMC this week and a lot of FED speakers means higher volatility intraday
- CME expects a 78% raising interest rates by 75 bps and a 21% of 100 bps.
- In addition, this week will also announce the US GDP Growth Rate QoQ Adv Q2 and June core PCE price index.
- Big earnings week in equities for a lot of companies (AAPL,AMZN,…)
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.