Analytical review. Weekly 12.07.2021

The terms “consolidation” and “uncertainty” are synonymous with market conditions this week. The index of total crypto market capitalization started the week with a slight increase, reaching a weekly peak around USD 1.461 trln. We could then see a drop to a local low of USD 1.322 trln (9.57% down ). The subsequent rebound only compensated for a little over half of the decline (6.14% increase) to USD 1.403 trln. By the end of the week, the index was still not above this mark, either.

BTC was not particularly volatile this week, actually staying within the 32 000–35 000 corridor. At the beginning of the week we could see a growth to 35 025, and then a drop to 32 175 (by 8.22%) in the middle of the week. By the end of the week BTC was gradually recovering, recouping most of the fall and consolidating around 34 300 by the end of the week.

ETH looked a bit worse. Nearly touching a local high of 2400, the asset fell to 2050 (by 14.39%) in the middle of the week, and stopped at 2147 by the end of the period under review, without compensating even a third of its decline.

Analysis of the cryptocurrency financial flows between exchanges, smart contracts and users indicates a continued outflow of BTC from exchanges. The number of ETH on exchanges also decreased.

According to statistics from the Glassnode service, about 40K BTC or 28% of the difference between the maximum and minimum volume on exchanges in 2021 has recently been withdrawn from cryptocurrency exchanges. The shortage of BTC on exchanges and its concentration in the hands of long-term holders may lead to the so-called “supply shock”, which may cause a new wave of BTC growth.

We can also add the growth of miners’ savings, as well as a record volume of venture capital deals on the crypto market in Q2 2021 to the list of positive indicators.

Open interest levels for BTC futures grew this week despite a strictly “sideways” price movement (probably due to the influence of positive news). Changes in open interest levels on ETH corresponded to the price: they were rising at the beginning of the week, and then declining.

Among the important news we should mention the expected IPO of Circle (USD 4.5 billion) through SPAC (special-purpose acquisition company) on the New York Stock Exchange (with a valuation of USD 4.5 bln), bypassing the IPO procedure. The deal is expected to be completed in Q4 2021. Bullish cryptocurrency company announced exactly the same deal the other day, but with a valuation of USD 9 bln. Apparently, the SPAC procedure is a good opportunity for cryptocurrency companies to go public, while avoiding a lot of regulatory problems that would arise in a standard IPO. The “institutionalization” of cryptocurrency companies in general is a very positive trend.

This week, U.S. investment firm Lincoln Avenue Capital acquired 1,000 BTC worth $33.5 million, which is about 5% of assets under management. The company also declared that it may transfer up to 20% of its assets into BTC in the future.

Capital International acquired a 12.2% stake of Microstrategy, which owns more than $2.7 billion worth of BTC. Thus, Capital International became Microstrategy’s second largest shareholder. After the release of the company’s report for the Q2 it will become clear how the structure of the owners and their shares have changed.

Binance has suspended the acceptance of payments in euros through one of the largest payment systems in Europe — SEPA. Prior to that, the company has repeatedly encountered regulatory problems in the UK, where the bank Barclay’s has suspended payments to Binance from their cards, the United States, Japan, and a number of other countries. The Binance CEO has recently even written a response letter on the subject, in which he diplomatically stressed that the increased level of regulation is an indication of the industry’s growing “maturity”. Obviously, the company is ready to make a lot of concessions and other steps to eliminate contradictions with regulators and there is no doubt that there will be some positive dynamics in this direction. However, there is no question that similar problems will haunt CEXs in different jurisdictions for a long time to come, and there will be new inconveniences and risks for services and their users. Against this background, DEXs look a much more promising alternative. DEXs are independent of regulation and monitoring, are anonymous, allow trading directly without third party involvement, and only the user has access to funds.

And now the bad news for meme-coin lovers: Tik-Tok has banned all advertising of financial services and products, including cryptocurrency. Now it’s going to be a little more difficult to pump the next “dog” or other meme-asset. The level of expertise of most “crypto-experts” in Tik-Tok leaves much to be desired, so most likely this event will not do much damage to the crypto community, and for some of its newcomers it will even help to save a deposit.

After the impressive growth of Open Interest (OI) in the week before last, the change of this indicator in the past days was much more modest. The total growth was about 5.5%, the size of open positions increased to 30 689 BTC. The main interest increase was in PUT options at 30 000 and CALL options at 36 000 and 40 000. Based on trading activity, the main trading volume begins to shift in the direction of options with an execution date at the end of September — the end of Q3.

The level of open interest for options with an execution date at the end of the month increased by 5% to 219 443 ETH. The difference was that most of the new trade occurred into CALL options at 2500 and 2800. This appears to be a reflection of cautious optimism about the blockchain because of the future EIP-1559 update. The global long-term picture remains unchanged for now.

PRO MODE

In addition to standard market analysis parameters, such as the volume of open positions in futures and options, available to a wide range of readers, under the new subheading “PRO MODE”, we provide an overview of a market parameters range that require special training or experience.

MarkIV for short term BTC options (via Derebit info)

Analyzing the changes in the set of short-term and medium-term options, we can note the stabilization of the market and a decrease in volatility. This fact finds expression in the tendency of the curve to symmetry and reflects the prevailing point of view among traders about the continuation of consolidation.

MarkIV for long term BTC options

The long-term outlook for options with an exercise date next year remains consistently positive. The prevailing volume of CALL options clearly signals the expectation of further growth.

MarkIV for short term ETH options

The recovery of growth confidence was also reflected in the curve for short- and medium-term ETH options. The dynamics are more confident in relation to BTC due to the approaching date of an important network update and a lot of attention to Ethereum-based projects from large venture capital.

MarkIV for long term ETH options

Long-term options have consolidated in their expectation of growth, counterbalancing some of the uncertainty from the last report. The CALL options curve clearly dominates, reflecting the confidence of the vast majority of traders in long-term growth.

If you have any questions, you can contact us as follows

via Telegramm — @DeltaTheta_Research

via email — Research@deltahteta.tech

The information published on the website, including the results of research, forecasts, estimates regarding financial instruments, on the nature, characteristics of a financial instrument (combination of financial instruments), changes in its (their) value, the results of technical and/or fundamental analysis is not an individual investment recommendation, and financial instruments or transactions mentioned in it may not match your investment profile and investment goals (expectations). It is your task to determine if a financial instrument or transaction meets your interests, investment objectives, investment horizon and risk tolerance level.

DeltaTheta Inc. disclaims any liability for potential losses in case of executing transactions or investing in financial instruments referred to in the information and does not recommend the use of this information as the only source of information when making an investment decision. The information may not be regarded as guarantees or promises of future returns on investments, risk levels, costs, break-even investments. The outcome of past investments does not determine future returns.

Analyses, reviews, news articles of DeltaTheta Inc are internal documents of the company, as well as for the purpose of informing clients. They are not advertisements for securities. Information is based on public sources deemed reliable, but DeltaTheta Inc is not responsible for its accuracy. Investing in securities involves significant risk and decisions about investments should be made by the investor.

To be the first to know about the latest news and events:
Official website: https://deltatheta.tech
Twitter: https://twitter.com/deltatheta_tech
TG NEWS (EN) : https://t.me/DeltathetaNEWS
TG chat (EN): https://t.me/deltatheta
TG NEWS (RU): https://t.me/deltathetanews_ru
TG chat (RU): https://t.me/DeltathetaRU

P2P options trading platform on Binance Smart Chain, Ethereum