Weekly Crypto Market Update – May 22, 2023

Last Week’s Recap:

• Tether will allocate up to 15% of its net realized operating profits to BTC purchases on a regular basis.
• Axie Infinity: Origins will be available on Apple’s App Store, with some geographical restrictions.
• OKX listed ORDI after Gate io.
• Binance to exit from the Canadian marketplace.

Legacy Markets – DXY

DXY has seen quite a large reversal from the 100-102 zone. With all the overhead price structure It’s unlikely that DXY will go straight up. When DXY slowdowns at the obvious resistance levels (106) it should give crypto and equities a good shot at seeing some strength. Especially after both are holding quite well under the pressure.

Legacy Markets – VIX

VIX is still weak for almost the entirety of May. It’s fairly apparent in markets with ultra-low volatility in most assets other than a few outliers.

BTC Weekly View

BTC is still slow bleeding since the 30k touch. The structure and speed of the down move seem to indicate it’s more corrective than an actual impulse move down. And BTC also had a hard time breaking lower than 26k. The PA we’re currently noticing is typical spot-driven slow accumulation while there is not enough velocity in the market for perps to really drive it higher due to a lack of speculative participants.

ETH Weekly View

ETH is still consolidating on support. If we look at the DXY chart it consolidated quite a while on the 100-102 support with a couple of fake breakdowns. We think ETH is building something similar in the 1600-1800 range as a new floor.

ETH/BTC

ETH/BTC is still in the range. The volatility on this pair is ultra tight right under mid-range. We’d expect this to start moving at a fast pace this or next week.

TOTAL2 – USD Market Strength

TOTAL2 is also still working on flipping the 2021 resistance. It’s fairly clear that the strength is in quality and not market-wide.

TOTAL2BTC – BTC Market Strength

TOTAL2/BTC is showing some relative strength. After alts bleeding out for weeks on end. However, the strength is mainly singled out in a few names and some projects in “value” areas. There’s no marketwide strength in alts. One should be very selective in what they hold/play.

Summary

• The crypto market is fairly compressed. Expect an expansive move relatively soon.
• Strength is centered around a couple of names in altcoin land.
• NFTs seem to be picking up strength with some collections rising quite a bit.
• The narrative for the moment seems to be about waiting on the debt ceiling limit in traditional markets.
• Crypto options update:
  • ETH 30-day 25 delta R/R range bound over the past month around the neutral level (+/-5).
  • ETH 30-day ATM vol continued suppression keeping us on the sidelines for DOV-related trades.
  • Some low IV fills in ETH Jun30 call expiries.

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

This post is prepared by Kairon Labs Traders: Joshua van de Kerckhove, Charles Belford, and Patrick LiEdited by: Rizza Carla Ramos