Analytical review. Weekly 21.06.2021
For the fifth week now, BTC, followed by the rest of the crypto market, remains in a consolidation zone. A rise has followed by a fall, led by a new increase, but past tops and bottoms remain unachieved. Since midweek, after reaching a local peak, total capitalization has fallen by 20% to USD 1,37 trillion.
BTC as the primary market driver fell from the highs of the beginning of the week by 20% and stopped at the strong support level of 32 000 USD in the past, after which it slightly corrected to around 33 200 USD.
The direction of ETH was in line with the general sentiment. At the end of the week, the decline was 24%, and the final rate is very close to the psychologically important 2 000 USD.
Analysis of cryptocurrency financial flows between exchanges, smart contracts, and users indicates that uncertainty remains in the market. Currently, there are quite a few stablecoins concentrated in the hot wallets of cryptocurrency exchanges and users’ wallets. The situation is the same with BTC and ETH reserves: despite constant withdrawals, the total size decreases much. Most of these funds remain in the most liquid form and can use for trading at any time. Potentially, the market situation looks a lot like the calm before the storm, where a smooth and measured movement can replace by a sharp rush up or down.
The BTC futures market was declining again after a slight increase last week. The trading dynamics remain weak, which continues to put pressure on the market. The level of open interest in ETH futures is declining for the second week in a row, reaching a local annual low in trading volume.
Much of the current price momentum in the market has been driven by recent news. The Chinese government appears to be seriously concerned about cryptocurrencies in day-to-day trading and investment activities. At the same time, the market is already familiar with the negative information from the country, recent measures involving strict bans on mining in several provinces. Additional prohibitions on cryptocurrency-related payment processing for the top 5 banks and payment systems have caused local crypto entrepreneurs to think seriously about the future. A private presentation for VIP partners by BITMAIN, the largest ASIC manufacturer, was dedicated to alternative jurisdictions for hosting miners, including Kazakhstan, Europe, and the US.
In addition to this government pressure on cryptocurrency capitalization, the international equity and commodity markets were also affected. After reaching all-time highs, prices began a global correction, triggered by the tightening of the US Federal Reserve’s rhetoric regarding China’s refinancing rate and intervention in the commodities market, which announced that it would print out state reserves to reduce metal and ore prices.
Analyzing one of the most important indicators of the recent bull market — new Stable Coin issuance, we notice that there has not been an influx of USDT for two weeks now, which is somewhat atypical. While other competitors continue to increase their issuance, albeit not very quickly, the central basic trading unit is stagnating in place. Tether CEO Paolo Ardoino attributed this to declining investor interest in the derivatives market, specifically futures. However, this fact may also be related to the company’s report on its reserves, which came out just about a month ago. Perhaps some clients decided to switch partners and are now looking for a new way of exchanging fiat money. Considering the amounts that Tether used to generate, it might not be straightforward, which partly explains the relatively slow pace of issuance growth and makes wonder about the role that USDT played in the past market growth.
On June 25, one of the largest executions of transactions on the options market expecting this week. The end of the financial quarter and half-year will see the market close about 45% of its current open interest, with more than 68 000 BTC (approximately $2.2 billion). Typically, the execution of such large trades is associated with higher volatility. Given the current short-term downtrend, the 20 000–28 000 and 32 000–38 000 could be considered the most likely areas for price movement.
On the ETH options market, the situation is similar — the volume of open interest is almost 600 000 ETH (USD 1.2 billion) which also corresponds to approximately 45% of all positions until the end of the year. However, an additional significant factor would be the situation on the DeFi market — where the DAI protocol is close to a liquidation volume of around 450 million. Together, these factors could have a more substantial impact on the price than on the BTC market, and, in the event of a further decline or a sharp move downwards, ETH could reach the lower limits of the 1440–2240 target range.
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
