Last Week Recap
- NFP came in mild, more or less around expectation.
- Bitcoin and Ethereum traded in a compressed range all week for the first time in a while.
- Michael Saylor gets sued for tax fraud.
- FED says it’s starting accelerated QT in September.
- OpenSea’s August transaction value was $498 million, down about 5.5% from July’s $527 million transaction value and the lowest since August 2021.
- Bybit is announcing zero fees on all spot trading pairs, starting September 6th, 2022, at 10am to celebrate reaching 10 million users
- Binance launched USDⓈ-M Binance Football Fan Token Index perpetual contracts with up to 25x leverage before the World Cup
- Curve’s native stablecoin crvUSD is likely to be launched next month
ETH Merge Monitoring Dashboard
- Protocols/Communities/Companies support ETH hard fork
- BitMEX: to offer leverage trading for potential Ethereum POW fork
- OKX: to evaluate and support the airdrop and withdrawal of forked tokens
- Binance: “will support The Merge,” In the case of new forked tokens, Binance will evaluate the support for distribution and withdrawal of the forked tokens.
- Poloniex: has enabled the trading of potential ETH forks, ETHS (ETH2) and ETHW (ETH1), and listed TRON-based ETHS and ETHW.
- APENET: the APENFT Marketplace will support all NFT trading on the ETHPoW chain, allowing APENET to facilitate the ETH 2.0 merging.
- Huobi: confirmed that it would support Ethereum forked assets on its platform as long as they meet the exchange security requirements
- Gate: Will Support ETH Potential Hard Fork and List ETHS and “Candy” Token ETHW
- MEXC: Supports Ethereum (ETH) 2.0 Upgrade & Lists Potential Hard Fork Tokens
Five major South Korean exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax), plan to support the airdrop and listing of Ethereum’s proof-of-work (PoW) hard fork token ETHW
- Protocols/Communities/Companies object ETH hard fork
- Circle: Circle plans to only support the Ethereum PoS chain after the Merge
- Tether: USDT supports ETH PoS transition
- Debank: All Products Do Not Support Ethereum Forks
- Chainlink: Will Not Support Ethereum Forks After the Merge
- Digital Currency Group: does not intend to back any Ethereum hard fork
- ETC Coorperative: Urges ETHPoW To Drop Ethereum Fork (ETHW) Plan
- Aave Community: Only Support Post-Merge Ethereum PoS
- Yuga Labs: Only accepts NFT on ETH Pos
- OpenSea: Will Only Support Ethereum Proof of Stake After Merge
- imToken: it will only support the Ethereum merge and not support PoW chains
- For a moment last week we saw the VIX falling back below 24. This aligned with the fall in DXY and the corresponding rise in ETH.
- For crypto, ideally, the VIX does break below 24 this week. If it does go higher into the 30s expect further derisking.
- A lot of the bid in underlying S&P options is because of hedging for this month’s FOMC. With participants willing to pay higher option premiums for their hedges
Open interest and funding rates
With ETH leading the whole rally so far, instead of looking at BTC OI this week, we’re gonna look into the ETH OI. There’s an obvious tell that the majority of the rally is leverage driven by directional speculators. But that said, with ETH trading at constant negative funding rates, there seems to be a large appetite for shorts, and with ETH holding above 1500 for a week now, there’s a good chance for these to get squeezed.
BTC Weekly View
- BTC is currently ranging between previous ATH and 24k on a larger timeframe. With the current price floating just above support, we don’t see a major catalyst for it to break below.
- The social sentiment also seems really bearish, and most people only start posting bearish after they’ve sold.
- That said, there still is a macro correlation between indexes and crypto, and if indexes drop too much, it will drag crypto.
ETH Weekly View
- Even though indexes saw another large drop last week, ETH held strong even in dollar terms. If indexes can find some sort of short-term bottom or range, we’re pretty confident ETH would get enough breathing room to rally higher.
- With the Merge inching closer, the trade opportunities are all around ETH.
- Last week ETH/BTC saw a strong pushback upwards into our red inflection point zone. If ETH can break free of this, we expect a major push to around ATHs in the ratio.
- Not only is this bullish for ETH but also for other majors on BTC ratio’s. But we’ll come back to that in the TOTAL2/BTC slide.
TOTAL2 – USD Market Strength
TOTAL2 is also still building a price structure under the 2021 support area. Given the magnitude of these structures in dollar value, it could range here for multiple weeks or even months.
TOTAL2BTC – BTC Market Strength
TOTAL2/BTC is breaking highs, slowly creeping out of the almost 2-year range. This is reflected in multipair pairs LTCBTC / XMRBTC / ZECBTC / ETHBTC, and much more are all in bull markets or close to it.
The best thing about it is that nobody is talking about it yet, which means the trend is early and can still run for quite a while.
The smallcaps are also entering their time inflection point vs. large caps. This current price structure is nearing completion and ready for an impulse move. Everything seems to be lining up around the timing of the merge or just before that.
*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.
- September is a month with multiple large events this should mean increased volatility.
- Quarterly expiries in September. Expect many hedges to come off that were taken for the merge fork trade.
- FOMC is also this month. The market has been getting a more dampened reaction around FOMCs. The current focus is on QT and how far FED will push that. In September, the FED is gonna accelerate their QT. That said, there are signs we’re getting stimulus packages in certain parts of the world (UK energy bill). This can be an early sign of FED/ Government needing to support the system again ( = QE), something to keep an eye on.
- Last but not least. This month, the Merge is coming closer at rapid speed. September is all about the merge. The current perception of the crowd is that the merge will be successful, given all the data around testnet merges.
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.