Analytical review. Weekly 11.10.2021
Over the past week, we could observe a significant increase in the total capitalization of the crypto market, it is worth noting that it is not linear — sometimes there were also short-term drawdowns. At the end of the last week, the total cryptocurrency market capitalization increased by approximately 13% and was 2.36T USD.
The BTC rate from October 5 to October 7 also showed a significant increase by 18% and reached 55 000 USD. The trades mainly took place in the flat channel 54 000 USD — 56 000 USD.
The ETH price was more restrained: at the beginning of the last week, the rate increased by 11% to the level of 3 600 USD. Further, until the end of the week, there was a flat movement of 3500 USD — 3600 USD.
In the dynamics of cash flows between exchanges and private addresses among stable coins, USDC remains dominant, the amount of the inflow of funds remains high. Simultaneously, USDT is not so actively used to replenish the balance of exchanges, the downward trend has been going on for the third week in a row.
The rate of BTC withdrawal has decreased. For ETH, the dynamics were also rather neutral — about the same amount was withdrawn as it was replenished.
There has been a notable increase in open interest in the BTC futures market over the past week. It is worth noting that for the time being the figures are still 20% lower than those observed in May at a BTC price of 56 000 USD.
The ETH open interest last week was more restrained: at the beginning of the week there was a slight increase, after which the movement took place in a flat direction.
MoneyGram (a global innovation leader in p2p transfers) announces an innovative partnership with Stellar to leverage blockchain technology. The partnership will allow digital wallets connected to the Stellar network to access MoneyGram’s global retail platform, providing a bridge between digital assets and local currencies for consumers.
Representatives of the US Federal Deposit Insurance Corporation (FDIC) said they are exploring the possibility of deposit insurance for stable coins. The so-called “end-to-end coverage” will insure token holders against losses of up to USD 250 000 in case of a collapse of the bank that holds the collateral.
The Big Four accounting firms, the American Institute CPAs group, some investor groups, and individual businesses have recently asked the Financial Accounting Standards Board to take action to improve cryptocurrency accounting standards. Important aspects are taxation as well as ESG (environmental, social, and corporate governance) standards.
This month, the crypto community can expect the approval of four new Bitcoin futures ETFs. A futures ETF, unlike a traditional one, is based not on the asset itself (in this case, bitcoin), but on futures, and falls under the regulation of the Investment Companies Act of 1940. Analysts and experts are positive about the prospects for approving a futures ETF, since the SEC has not previously expressed controversy regarding this product, and recently the Volt Crypto Industry Revolution and Tech ETF was approved — another “indirect” Bitcoin ETF investing in technology companies, on the balance of which has BTC.
In the background of news about the work of states on their own Digital Currencies of Central Banks (CBDC), an interesting feature of this type of means of payment becomes obvious. Even at the start of testing the so-called “digital yuan” in China, it became known that the digital currency will have a “statute of limitations”, that is, the state, under the threat of freezing funds, will force citizens to spend currency at a certain point in time, thereby fueling the country’s economy. This manipulation by the issuer can deprive citizens of the opportunity to create savings in digital currency.
Tether has published a response to another accusatory article by Bloomberg, in which the company is subjected to another wave of criticism. Representatives of the company called the material in the publication “A collection of stale news from different places and dubious sources with a preconceived presentation.” In their response, Tether emphasized the security of all its assets and the transparent nature of the work.
Bakkt, a digital asset marketplace that allows consumers to buy, sell, transfer and spend digital assets, has announced a partnership with Google to expand the reach and usability of digital assets to meet rapidly changing consumer demand and preferences. Bakkt users will be able to add their Bakkt Visa virtual debit card to Google Pay to purchase everyday goods and services online, in a store, or wherever Google Pay is accepted. Digital assets like bitcoin will be converted to fiat currency to make these payments.
According to the latest data from analytic services nansen and theblockcrypto over the past week the trading volume of NFT tokens is far from its August highs. At the same time, the trading volume of gaming NFTs remained almost unchanged over this period of time, the main changes concerned the Art NFT sphere.
As you can see from the charts, the number of active Art NFT wallets has remained unchanged over the past few weeks.
The leadership of the Art NFT Crypto Punks collection is doubtless: the capitalization at the moment is 1.4 mln ETH, followed by the BoredApeYachtClub 436,979 ETH. The third place takes Art Blocks (0xa7d8) — sets of different fragments, like a work of art.
It is worth noting that despite a slight decrease in trading volumes, there was a slight upward jump in NFT capitalization indicators last week. Such data indicate that there were few transactions, but those were made at high prices.
In terms of trading volume, NFT Axie Infinity is the most actively traded in the last 24 hours, with MutantCat following.
The trading volume for options with the expiration date at the end of October increased by 23.3% at the end of the week and was 36 835 BTC. Trading in PUT options increased significantly at the levels of 45 000 and 50 000.
For options with a strike date in December 2021, the open interest rate increased by 11.6% and was 70 917 BTC. The gain was distributed approximately evenly in the CALL range between 60 000–200 000. The most traded levels are still 100 000 and 200 000.
March options were already trading slightly more actively than last week: the increase in open interest was 6.9% and reached 13 272 BTC. The gain was distributed evenly between the CALL and PUT options.
At global levels, total activity increased by 15.6% to 169 854 BTC. The volume of CALL options was more than double that of PUT options.
For short-term options with the expiration date on October 29, 2021, trading volume increased by 7.9%. Max pain price has shifted from 3000 to 3200.
For options with the expiration date on December 31, the trading dynamics were low, the level of open interest increased by only 1.3% and was 497 700 ETH. The gain was distributed evenly between the CALL and PUT options.
Trading in options with the expiration date following the results of the first quarter of 2022 was more active this week, increasing by 6.9% to 179 675 ETH.
As for the level of general interest, it increased by only 0.2% and was 1.2 mln ETH. The trading ratio shifted further towards PUT options.
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)
Spot prices had a strong reaction following the news about the possible imminent approval of the Bitcoin ETF in the US market. However, in the options market, these events were reflected only in a short-term surge in volatility at the beginning of the week. Further, option traders stopped paying significant attention to the probabilities of growth, possibly underestimating the prospects for the continuation of the new rally.
Options Trading map
The trading map last week reflected two main trends — the expectation of growth by the end of the year and fears of a correction in the near future. As part of the growth, the bulk of trading is concentrated in call options with the expiration dates on December 31 and strikes of 50 000 and 70 000. Strategies associated with these levels accounted for more than 43% of trading activity. By the end of the week, short-term put options with the expiration date at the end of October also intensified. The main strikes were 46 000 and 48 000. The volume of transactions at these levels was more than 1000 BTC.
MarkIV for short term ETH options
In the short-term period, the charts of the ratio between put and call baskets show continued pressure on price. Despite the fact that trading dynamics and volatility were relatively calm last week, positive sentiment is only noticeable for options with the expiration date in late November. This situation signals the absence in the market of short-term strong favorable reasons for growth.
Options Trading map
The map of trades significantly differs from the last week. The main trading volume fell on call options, and a significant part of the transactions was complex and associated with the December and March expiration dates. The main traded strikes in various combinations were at the levels 5 000, 6 000, and 7 000.
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