Analytical review. Weekly 13.09.2021
The total capitalization of the crypto market fell by around 16% and returned to the levels of two weeks ago. Uncertainty about the legal regulation direction and the threat of litigation put a lot of pressure on prices. During the week, capitalization even fell below 2T USD, but then corrected to 2.06T USD by the end of the week.
The BTC exchange rate remained the main movement indicator, despite the fact that BTC’s dominance in the overall market has been steadily declining recently. The maximum drop was 14.5% from the beginning of the week, after which the rate stabilized at USD 45 000.
The ETH price was no exception and also moved in the general trend. After a 20% drop, the rate consolidated around 3300 USD.
In the dynamics of cash flows between exchanges and private addresses, USDT continues to dominate among Stable Coins. Unlike USDC, which is withdrawn more often than used on exchanges, USDT still prevails in deposits, although the average deposit size decreased compared to the previous week.
At the same time, traders continue to withdraw BTC and ETH from exchange balances. The difference is that ETH is being withdrawn less and more often using local price highs to exchange for Stable Coins, and possibly “new wave” altcoins — SOl, DOT, AVAX and ALGO. These tokens demonstrated advance growth relative to the overall market last week.
The impressive growth in futures open interest in BTC and especially ETH was interrupted earlier in the week, after the market reported a possible lawsuit by the SEC against the largest US cryptocurrency exchange COINBASE. The surge in volatility led to a sharp drop in rates and, as a result, a large number of forced liquidations of long positions.
After prices stabilized on the spot markets, futures traders take a neutral stance and continue to assess possible risks.
Mastercard is increasingly ‘entering’ the cryptocurrency space, this time by acquiring CipherTrace, a compliance and analytics provider. The acquisition is part of Mastercard’s digital asset strategy to give customers, merchants and businesses more choice in how they move digital value. It follows a number of company investments, including partnerships with Uphold, Gemini and BitPay to create cryptocurrency cards, the creation of new platforms to test and support central bank digital currencies, programmes to support greater use of blockchain and NFT technology, and the ability to support some Stablecoins directly on its network.
Silicon Valley venture capital giant Andreessen Horowitz, also known as A16Z, anticipating possible disputes with regulators, has begun hiring ex-officials as advisers. The first such hire was Brian Kintenz, a former senior official at the US Commodity Futures Trading Commission.
After a series of SEC claims against Uniswap and Coinbase, there has been mild panic among the crypto community. We should recall that serious investors such as Andreessen Horowitz, Paradigm, Union Square Ventures, Version One, Parafi Capital, Variant, SV Angel are behind Uniswap and Coinbase. How will the funds, their influential leaders and the cryptocurrency community as a whole respond? Given the circumstances and the general situation of heightened market activity, the answer will come soon enough.
The Block reports that North America’s largest miners have accumulated a record 18 000 BTC in their accounts. They have also mined more than 10 000 BTC since the beginning of the year. Judging by the lack of desire and need to sell, sentiment for a continued rally is strong among US traders and investors.
“Stablecoins and decentralised finance are challenging banks’ business models and financial authorities must act faster to develop formal digital assets”, Benoit Coeuré said in a statement Friday. The comments from a Bank for International Settlements spokesman and former European Central Bank board member underscore growing fears of financial authorities about the boom in cryptocurrencies and other digital financial innovations.
The UK Post will begin offering users the ability to buy cryptocurrency this week. People who use the EasyID app will be able to buy cryptocurrencies using vouchers from decentralised cryptocurrency exchange Swarm Markets. The vouchers can be exchanged for Bitcoin or Ethereum on the Swarm platform.
Buying real estate, cars and other property with money borrowed against the collateral of cryptocurrency is already a reality. Crypto-enthusiast Michael Anderson recently bought an apartment in San Francisco using one of the platforms, as he told the Wall Street Journal.
According to the current nansen and theblockcrypto analytics services, the last three weeks have seen a decline in the volume of nft token trading. After peaking in the second half of August at USD 1B per week, volume has fallen to USD 370M. At the same time, the trading volume of gaming nfts remained almost unchanged during this period of time and remained at around 150m USD, with the main changes affecting art nfts only.
At a time when the leadership of the Crypto Punks art-oft collection is unquestionable (capitalization at the moment is 1 305 403 ETH, while the nearest competitor, BoredApeYachtClub has 463 003 ETH), the attention of traders and collectors is also attracted by new issues of nft tokens.
Two new issues, Sneaky Vampire Syndicate, dedicated, as one might easily guess, to the creative realization of vampires and influence asteroids, a space-based MMO strategy on the Ethereum blockchain, accounted for the bulk of trading in the last 24 hours.
The options market volume increased for the eighth week in a row. The amount of open interest on trades with an exercise date at the end of the third quarter — September 24 increased by 6.9% to 60 061 BTC. The difference in trading volume between Call and put options has narrowed from two and a half times to two times. For Call options, the most popular levels were 50 000 and 64 000.
The amount of open interest in options with exercise in December increased by 2.2% to 51. 585 BTC. The highest interest was concentrated in the 100 000–200 000 range for Call options. For Put options, these marks were 32 000, 20 000–24 000.
The volume of total interest for all exercise dates increased by 2.7% to 170 738 BTC. The increase was equally split between Call and Put options. The main increase in interest for call options came at 60 000 and 70 000, while Put options saw increases of 20 000 and 40 000 marks.
The volume of open interest for options with an exercise date of 24 September increased by 4% to 405 198 ETH. Call options traded 28% more than Put options. The increase in interest in Put options was many times greater than in Call options.
Options with an exercise date of 31 December were not very popular, trading increased by only 2.4%, the total volume of open interest is at 452 817 ETH. The main trading activity for this date is expected after the end of the third quarter.
On the general market, the level of interest also did not show a high increase — only 2.2%, amounting 1 333 885 ETH.
In addition to our standard market analytical metrics, such as volumes of open positions in futures and options, available to a wide range of readers, under the new subheading “PRO MODE” we’re introducing the overview of market metrics that require special expertise or experience.
MarkIV for short term BTC options (via Derebit&GVOL info)
The rapid price collapse on the spot market at the beginning of the week was also quickly reflected in the options market. In the short and medium term, Put options regained popularity, which generally balanced the bid and offer book on the market. After the basic volatility caused by the price declines had diminished, Call options again began to dominate trading, reflecting the traders’ mood for a price stabilization in the range of 44 000–50 000 in the near future.
MarkIV for long term BTC options
In the longer term, the general sentiment remains rather positive. The structure of the options curve is almost unchanged, consequently traders consider the current decline as a short-term flare-up of volatility and are not ready to seriously correct the overall market view at the moment.
MarkIV for short term ETH options
Market options ETH trends are reconciling with BTC’s. A sharp decline of the price has caused a significant impact on short-term trading, but in the medium-term with a horizon till the end of October traders don’t expect a significant continuation of the decline.
MarkIV for long term ETH options
The situation didn’t change in a long-term perspective, despite the fact that most of the traders are expecting at least a try of the price to establish a new ATH. Situations like last week make us think about insurance and options for the current level of support and resistance (that don’t exclude current levels) in the next cycle of market development in 2022.
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