Macro Market Update September 26th, 2022

• DXY breaks all time highs dragging markets back to June lows.
• GBP flash crashes Sunday evening on market open.
• Japan central bank intervenes on USD/JPY.
• FED raised 75 bps and Powell told the market they’re still set on bringing inflation down. This was before GBP & EUR started accelerating downwards. The flash crash of GBP on Sunday night will raise some eyebrows worldwide on FED policy measures.
• SEC is getting more involved lately on crypto scams and charging 17’ ICO’s

Legacy Markets

• VIX is still pushing after FOMC last week and Putin mobilization.
• The VIX will likely cool off into end of month. There are a lot of FED speakers this week and with GBP/USD flash crash overnight the chances of getting some more dovish comments are relatively high. This should slow down DXY in the short term which will give crypto relief.

Open Interest & Funding Rates

OI on BTC is relatively flat. Quarterly futures & options expire 30Sep22. OI is particularly high on Ethereum. Markets are at an inflection point and a break up or down is expected to lead to quite a sustained trend.

BTC Weekly View

• BTC volatility is flatlining. With BTC currently almost retesting the downtrend started in November we expect the low volatility to end soon. As mentioned in previous slide the move up or down will most likely lead to a longer trend.
• If BTC breaks under the current low ±17.6k there will most likely be a quick drop to ±13k range.

ETH Weekly View

• ETH is trading relatively higher then BTC. Even after the drop in ETH/BTC, ETH is still higher. If ETH would fall back into the June lows price structure BTC likely broke the current low at 17.6k.
• On the other hand current prices are for crypto probably the best opportunity to set a higher low on macro timeframe.
• With stuff starting to break in fx markets the FED pivot is slowly drawing closer and closer the question is if crypto can keep it’s current lows before they pivot

ETH/BTC

• ETH/BTC is back at midrange after the large rally before the merge. For continued upside in ETH the ratio should start bottoming around current prices.
• The pressure should start easing on ETH after this week with a large quarterly option expiry and quarterly futures expiry. We’d like to see strength on the ETH/BTC ratio around these prices and renewed outperfomance vs Bitcoin.
• The real break is still above this large price structure ±0.088

TOTAL2 - USD Market Strength

• TOTAL2 is basically a carbon copy of ETH/USD. Rejected at the 2021 lows and currently also at inflection point.
• There was some underlying strength in some highcap alts like XRP and ATOM

TOTAL2BTC - BTC Market Strength

• TOTAL2/BTC is structuring out on the highs of 17’ and 21’. With other BTC pairings starting to push (See XRP/BTC for example). We think the ATH break is a matter of “if” not “when”.
• With BTC being dominated by macro factors it makes sense to play relative strength against BTC inside crypto itself. This way the market has a “hidden” bullmarket in the worst way with usd valuations lower while BTC ratio’s go higher.

SH*TPERP/ALTPERP

• Lowcaps started losing strength over the weekend while DXY ran ATH’s and the market liquidity is getting sucked dry
• Seek outperforming highcaps that suck up liquidity (XRP,ATOM..). Liquidity is scarce at the moment and it’s concentrating around a few trending coins.

*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.

Summary

• Multiple FED speakers all week. The market is looking for dovish statements after the GBP/USD flash crash for any potential midterm upside.
• Large quarterly crypto expiry week mainly due to ETH positioning unwinding on futures and options.
• Seems like finally the average participant is noticing the DXY strength usually this happens before large stalling points so together with GBP/USD flash crash it would make sense for the dollar to start a larger corrective structure. This would also mean upside relief for crypto.
• BOE let the market know it at least needs a 200 bps rate hike to support GBP.

DISCLAIMERThe 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.