Analytical review. Weekly 07.06.2021
The cryptocurrency market is in its second week of lull. Over the past few days, total capitalization has remained almost unchanged at $1.64 trillion. It was up 4% over the week, touching a high at $1.72 trillion.
The price of Bitcoin was 36,033 USD, remaining almost unchanged over the week, and trading in a corridor between $35 000 and $39 000.
ETH continues to rise despite the overall situation, and quite noticeably so. The second-most-capitalized cryptocurrency continues to close the gap to BTC, growing around 10% over the week and stopping at $2770.
The cash flows’ movement between exchange addresses and private cryptocurrency owners shows a continued, but heterogeneous interest in cryptocurrency trading. The process of buying and withdrawing BTC from exchange addresses runs parallel to the consolidation of large amounts of BTC on Binance. This disproportion is more clearly visible in contrast to the movement of ETH, which is evenly split between exchanges, users and DeFi smart contracts. An additional noteworthy factor is the issuance of USDT and USDC stablecoins, which have not been converted into cryptotokens but have settled in the wallets of large holders and exchanges. Significant free money supply along with consolidation of BTC on one exchange could be an early signal preceding a sharp movement in the crypto market. The price movement direction in the near term will depend on the nature of the news.
The general news backdrop remained positive recently.
The volume of positions opened in the futures market is far from its all-time high in May and remains at the same level. Overall activity in the BTC and ETH blockchain is declining — the number of active wallets is falling and the number of DeFi transactions is declining.
Following the sharp price moves associated with Elon Musk’s Twitter posts, attitudes towards him in the crypto community have begun to shift from equilibrium-neutral to negative. The hyperinfluencer’s latest bitcoin-related posts have no longer resulted in any significant reaction in the market, giving reason to wonder about the strength of their future impact on the crypto market.
Greyscale Trust continues to rebalance its portfolio by selling BTC and ETH worth around $55 million last month, spending some of this money to buy MANA, LTC, LINK altcoins.
Securities commission postpones decision on ETH ETF to July, again pushing back the possible start of a new market rally.
Several heads of major investment funds and banks — Fidelity, JP Morgan and Guggenheim, tend to view the decline as incomplete, but continue to believe that BTC will reach the $100 000 mark this year. Such beliefs are reflected in the ongoing redistribution of crypto-assets between new buyers and long-term large holders.
The level of open interest in BTC options for the month of June continues to split clearly into two zones. Consolidation levels between 28 000 and 40 000 are saturated with PUT option offerings and could act as support targets in the event of a price decline. The levels between 44 000 and 52 000 are the first target zone in case of an increase and in turn can be seen as a likely resistance in case of an increase. An additional, second zone with more CALL orders is located in the 60,000–80,000 range, reflecting mid-spring investor optimism, and seems difficult to be achieved over the coming week.
For ETH, the situation in the options market is more unambiguous. Judging by the volume of open positions, the nearest target level of growth is around 3200. Given the divergent growth of the last two weeks in relation to the total capitalization of the crypto market, we can expect that this mark can be reached in the near future. The relative support levels in the event of a price decline will be situated in the zone from 1500 to 2250, where a large volume of PUT options is located.
Overall, the market is relatively stable. The volume of speculative interest in cryptocurrencies continues to decline, but that could be reversed at any time. It is worth keeping in mind that after such a bright and strong growth last year, the market has attracted the attention of many large traders and corporations. These types of traders always have plenty of opportunities and tools to turn things around quickly.
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