Analytical review. Weekly 16.08.2021
After another week of growth, there are more and more arguments in favor of calling the current market situation a “new bull run”. Starting at 1.7T USD, total cryptocurrency market capitalization reached 2T USD at the end of the week (+17.6%). The last time we saw two trillion $ capitalization was on May 19.
BTC seems to have finally consolidated above 40,000 and reached a local high of 48,000 at the end of the past week. So far, there are more arguments for further growth than for another flat and the mood of market participants is generally “bullish”. We’ll see how BTC behaves in an area of 50 000.
ETH hadn’t been slowing down since the network update and it rose more than 14% during the week. Here we also found records: the mark of 3330 was reached for the first time in almost 3 months.
By analyzing the financial flows of cryptocurrencies between exchanges, smart contracts, and users, we can see that, during another week of growth, market participants continued to buy BTC and ETH with the help of stabelcoins deposited to exchanges. The following facts may seem quite interesting. First there were more withdrawals of ETH than of BTC. Secondly, the volume of Tether deposited on exchanges significantly exceeded the volume of USDC.
If we check the levels of open interest in BTC and ETH futures, we can see that right now, from investors’ point of view, ETH looks a bit more “bullish” than BTC. Even though overall growth dynamics slowed down, Ethereum has many potential points of growth (development of nft, play-to-earn industry, decrease of emission, etc.), which can lead to outperforming, concerning BTC.
The news background of this week is generally positive.
Mawson Infrastructure Group increases its mining capacity and buys 17,352 additional units of the latest generation ASICs from Canaan. Sometime before that, Marathon Digital Holdings bought 30,000 S19J farms from Bitmain. Miners are getting ready for the upcoming rally and large funds are also trying to profit from it: Fidelity bought 7.4% of Marathon and now has a stake in it along with Vanguard (7.58%), Susquehanna (2.7%), and BlackRock (1.59%).
Miners have also begun to accumulate Ethereum after a successful “London” update.
Mark Cuban and Elon Musk are now like-minded about Doge’s optimism. Recently the Dallas Mavericks basketball club, which Mark owns, announced special pricing offers for those who will pay in Dogecoin. In an interview with CNBC, he spoke well of the Doge community and the prospects of the project in general. Elon, for his part, backed Mark, and Doge, naturally, gained in value.
Small retail investors renewed their interest in BTC and began to buy actively. Among the possible reasons for this phenomenon, analysts named The B Word conference, during which Elon Musk announced that he and his company SpaceX are holding Bitcoin, as well as the high interest from other major corporations (Amazon, Walmart, etc.) and institutional investors.
The president of Argentina, Alberto Fernandez, expressed his openness to digital assets and Bitcoin, in particular, calling the latter a good defense against inflation. At the same time, the head of the country’s central bank spoke out against it, calling Bitcoin a threat to economic stability. By the way, Argentina is a promising jurisdiction for mining (low electricity prices).
Polygon acquires Hermez Network (one of the leading zero-disclosure cryptographic protocols) for USD 250M. It is the largest deal in the history of the network and the DeFi industry, related to the combination of technology, tokenomics, and teams of two major projects.
The options market volume is growing for the fourth week in a row. The volume of open interest on deals with the execution date at the end of the third quarter — September 24 increased by 8.7% and amounted to 45,009 BTC. Call options still accounted for the major part of the growth. The most active trading occurred at 64,000 and 80,000. Potentially, accounting for the time left till the contracts’ execution, the area of 56,000–64,000 is the most probable target in case the growth will continue. Put options at 32,000 have also grown in volume, as a possible hedge if the current trend weakens and reverses.
In terms of open interest, options with execution in December did not increase as much as options with execution in September. The growth was about 4% and amounted to 44,588 BTC. The main growth occurred in call options at the levels of 64,000 and 80,000. Judging by the coinciding levels of the prevailing activity and interest for the options at the end of the third and fourth quarters, these two marks can be considered as the nearest growth benchmarks.
The total market size for all expiration dates increased by 6.7% to 151,120 BTC. The main growth was seen at 50,000 for call options, and 40,000 for put options.
The volume of open interest for options with an execution date of September 24 increased by 3.2% to 297,424 ETH. Put options were most actively traded at 1,600 and 2,560, forming trading levels in case of price declines. For call options, the main increase in market activity was at the 6,000 and 15,000 levels.
For options with an execution date of December 31, the increase in trading volume was 6.4%, with total open interest at 415,068 ETH. The increase was in call options, among which the most popular levels were 5,000 and 10,000.
By analyzing the data on options at all execution dates, the strengthening of the value of levels 7,000,8,000, and 12,000 should be noted. These levels accounted for the most significant increase in the trading volume of call options.
In general, the level of global interest rose by 4.8% to 1,244,514 ETH.
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 category “PRO MODE”, we provide an overview of several market parameters that require special training or experience.
MarkIV for short term BTC options (via Derebit&GVOL info)
While spot market prices were rising, options trading became more dynamic. In the short term, despite the increase in volatility, the bias in the order structure toward call options persists. Despite this, a test of the 50,000 level does not promise to be easy and quick.
MarkIV for long term BTC options
In the long run, call options also dominate, and by a wide margin. There is a rather interesting situation in the market, with high demand for call options alongside high volatility and liquidity. This situation provides many opportunities for different strategies.
MarkIV for short term ETH options
The ETH options market is not as turbulent as BTC, but the effects of the “London” update already show themselves. The preponderance in favor of call options is stable and tends to increase.
MarkIV for long term ETH options
Based on the structure of the market and the general mood, we can expect that the price will not stay at this level for a long time, and by the end of the year we may see new levels of ATH.
In the long term, with the launch of PoS and ethereum 2.0, it seems that there are no more factors that can negatively affect the upward price movement.
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