Weekly review. Weekly 04.10.2021

As you can see on the chart, on September 30 we could observe a steady growth of market capitalization. As a result, by the end of the week market capitalization increased by about 19% to 2.14T USD and continues to hold these values.

The BTC rate also began a sharp rise on September 30 and by the end of the week, it grew by about 18.5% and reached 48 500 USD. As of October 4, BTC holds its position at USD 47 700.

Alike BTC, by the end of the week the ETH growth was about 24% and reached 3450 USD. As of October 4, ETH holds the position at 3 350 USD.

Talking about the cash flows dynamic between exchanges and private addresses among stable coins, USDC is increasing its superiority over USDT.

Comparing to last week, there is an inflow of BTC and ETH to exchanges.

A similar situation was observed with open interest in the ETH futures market.

Since September 30, open interest in the BTC futures market has gotten a tangible increase.

Last week’s news has a lot to tell us

The Biden administration views the regulation of stablecoin issuers as analogous to banks. It is also expected that Congress will consider options for legislation for such firms, which will be adapted to their business models. Such steps should allay regulatory concerns about the violation of the financial stability of the state by stablecoins.

After the quarterly rebalancing, Grayscale Investments (the largest fund managing digital assets) will add Solana (SOL) and Uniswap (UNI) tokens to its Digital Large Cap Fund. New assets will account for 3.24% and 1.06% of the fund’s components, respectively. No adjustments have been made to the DeFi Fund.

The Kucoin exchange is cutting off Chinese users. They will have to withdraw their funds from the exchange before the end of the year. As in the case of other popular exchanges, this decision was made against the backdrop of another wave of regulatory pressure from the Chinese authorities.

The US Federal Reserve officials say that the stimulus will not be reduced to “pre-pandemic” levels. Government bond purchases will continue until inflation and unemployment targets are met.

After activating the “London” update on the Ethereum network, miners have accumulated over 2 million ETH, according to a study by Kracken Intelligence. The researchers speculate that the accumulation was due to the fact that after the upgrade, ETH became a deflationary asset, which prompts the expectation of its price growth in the future, as well as due to the NFT boom and DeFi success.

The Bank for International Settlements (BIS) specialists conducted a study and concluded that the impact of central bank digital currencies (CBDCs) on the banking sector can be controlled. If CBDC is implemented too quickly, the position of traditional lending institutions can be shaken, so it takes time to develop leverage. If CBDC has significant advantages over traditional money, this could increase the pressure even more.

Member of the US House of Representatives Madison Cawthorn posted a tweet in which he suggested using the cryptocurrency (without specifying which one) as a new gold standard. Despite the fact that the idea itself looks to be peculiar, given the abolition of the gold standard back in 1933 (and, so far, the high volatility of cryptocurrencies), expanding the discussion at such a high level (preferably with the involvement of specialized experts) will definitely benefit the crypto industry.

Visa is working on a new cross-chain payment solution that will allow transfers with automatic conversion both in CBDCs of different jurisdictions and in different stablecoins. The Universal Payment Channel (UPC), according to the developers, will make CBDC more attractive to users and businesses around the world.

According to the analytical service Kaiko, Russia is in the first place in terms of trading volume on the Finnish service Localbitcoins. In the second place, by a wide margin, is the United Kingdom, in third — Columbia.

The Central Bank of England gathers a team of experts to discuss the possibilities and prospects for the development of a national CBDC. The 26 members of the technology forum include Simon Brashaw, technology manager for online store Asos, Mark Shaw, director of global payments strategy for music streaming services company Spotify, and James Whittle, director of standards and architecture for payments giant PayPal.

NFT

According to analytical services nansen and theblockcrypto, over the past week, the trading volume of NFT tokens is far from its August highs. At the same time, trading volumes have remained practically unchanged over the past few weeks.

Axie Infinity is still in the lead in terms of trading volume for gaming NFTs.

CryptoPunks and CyberKongz (Gorilla Avatar Collection) dominate in terms of NFT trading volume over the past 24 hours.

NFT capitalization and trading volume over the past few weeks have been moving in a similar scenario in a relative sideway trend.

Given the high activity in the public space from regulators, crypto companies and the high expectations of the industry regarding regulation and licensing from the United States, the activity in the options market is quite high both in the short and medium term. Analyzing the options board with the expiration date at the end of October, the main trading levels are clear — 35 000 and 40 000 for put options and 50 000–60 000 for call options. Traders expect that trading activity will remain within this framework until the end of the month. At the same time, the expectations for growth are higher than those for the decline.

For options with an execution date in December 2021, the open interest rate increased by 7.3% to 63 500 BTC. Call options accounted for the bulk of the gain. The most actively traded levels were 40 000, 80 000, and 100 000.

March options were not traded that well, the increase in open interest was 3% and reached 12 411 BTC in total, without any dominant level.

At global levels, total activity rose 7.5% to 146 889 BTC. Call options were traded several times more, the main levels were 50 000, 60 000, 80 000, and 100 000.

For short-term options with an execution date on October 29, 2021, two trading zones have formed — from 2 000 to 3 000 for put options and 4 000 and higher for call options.

For options with the expiration date on December 31, the trading dynamics were low, the level of open interest increased by 1% and was 491 251 ETH.

Options with the execution date at the end of the first quarter of 2022 were also not very popular, increasing by only 2% to 167 923 ETH.

At the same time, we should note that the level of general interest increased by 6% and was 1 192 099 ETH. Such dynamics allow us to conclude that last week the interest of traders was concentrated on short-term options, therefore, the levels of execution for the dates of the end of the month acquired additional significance.

PRO MODE

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

MarkIV for short term BTC options (via Derebit&GVOL info)

After positive comments from the head of the FRS head and the announced desire of the Biden administration to regulate companies issuing stable coins by analogy with banks, the delta curve of short-term and medium-term options baskets has significantly balanced due to an increase in call options trading.

Options Trading map

Starting with this weekly review, we decided to focus more on the current dynamics of options trading and stopped publicly monitoring changes in the long-term options curve. Instead, we would like to offer you analytics of last week’s trades — which levels were the most popular and in what volume. Data from the analytical platform GVOL and OTC trader Paradygm show that the greatest activity was concentrated on the dates of the end of October and the end of November. Call options traded nearly four times as much as those. Major levels were 70 000–100 000 for November and December, 50 000 and 55 000 for October. The dominant strategy was to trade call spreads at 50 000–60 000 and 70 000–100 000.

MarkIV for short term ETH options

The curve of the ratio of put and call options for short and medium-term options has significantly balanced, within the framework of the general market trends described above, while the expected volatility is at its local monthly lows, which leaves a certain margin for further growth.

Options Trading map

Despite the general trends with the Bitcoin market, the options trading map for Ethereum was significantly different. The beginning of the week was marked by buying short-term put spreads at around 2 600–2 700–2 800 to insure the current situation in the Asian stock markets. After the situation with local debts cleared up a bit, traders began to trade more on long terms and strikes, shifting the focus to pure buying or selling (without actively using options strategies).

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via email — Research@deltahteta.tech

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