Weekly review. Weekly 27.09.2021

At the beginning of last week, there was a downward trend, after a $ 1.8 trillion drawdown, the capitalization of the entire market started to recover. It did not work out to the indicators of the beginning of the week though, and after a slight correction, the market consolidated the level of 2T USD.

The BTC exchange rate had better positions: since the beginning of the week there was a relatively steady rise in the rate, but on September 24 there was a sharp drop by 10% to the level of 41 000 USD. By the end of the week, the rate recovered to the corridor of 43 000 USD — 44 000 USD, which looks rather optimistic compared to the lows at the beginning of the week.

The ETH price showed a similar movement: at the beginning of the week, the rate declined to around 2 700 USD, with further correction, and was traded in the range of 2 850 USD — 3 200 USD.

In the cash flows dynamics between exchanges and private addresses among stable coins, the situation has drastically changed. For the first time in a while, USDC could become a leader in terms of the inflow of funds to the balance sheets of exchanges and noticeably move further from USDT indicators.

Comparing to the previous week, ETH has been funded more than last week. Traders actively reacted to the increased volatility, insuring balances against a possible continuation of the decline. The dynamics of BTC showed an opposite movement — the price decrease was used as an additional reason to buy with a perspective of future withdrawal to an external wallet for storage or trading.

The BTC futures market experienced an uncertain recovery, which, on September 24, was interrupted. After the price decline, the trading volume did not recover, which potentially signals a possible decline continuation, due to the lack of growth drivers.

There was a similar situation on the ETH futures market. The inability of the spot market to break through all-time highs resulted in sharp price pullbacks and a significant number of forced liquidations for leveraged positions.

The background of the past week was mainly centered around negative news from China.

After Friday’s Bloomberg article about a complete ban on cryptocurrency transactions in China the market dropped. However, an interesting fact is that these documents appeared in the internal Chinese info space way earlier — on September 3 and 15, and the market reaction to this news was already there. It could be a massive manipulation attempt.

A new decentralized stable coin, RMB, will be launched in China, the exchange rate of which will be pegged to the digital yuan. The stable coin itself is of offshore origin and will be linked to the state digital currency of China only formally. Unlike popular stables like Tether (USDT) and USD Coin (USDC), RMB is completely decentralized and doesn’t have one specific issuing organization. The new stable coin project will facilitate international trade in the Lingang Special Zone in Shanghai after the Chinese government allowed the free trade zone to trade freely in July with an offshore yuan-pegged stable coin.

Crypto exchange FTX has moved its headquarters from Hong Kong to Nassau, Bahamas. Exchange CEO Sam Bankman-Fried explained this decision by increased regulatory pressure from the Hong Kong authorities, as well as the absence of mandatory quarantine on arrival in the Bahamas.

Huobi and Binance have stopped new user registrations from China. From now on, customers cannot use Chinese phone numbers to register new accounts. This decision was made by the companies amid another wave of repressions against cryptocurrencies by the Chinese government.

Sparkpool, which accounts for about 25% of the total Ethereum hashrate (the largest ETH mining pool), is closing up its activities in mainland China.

Twitter launched a new feature for Bitcoin transfers via the Lightning network. With the help of the new solution, it will be possible to support content creators who have downloaded the feature. It also offers the ability to connect third-party services: Cash App, Patreon, Venmo, etc. At the moment, the solution is available for all iOS users. Android integration is under development.

Deutsche Bank senior economist Marion Labour showed a positive attitude in an interview about bitcoin’s role as “digital gold” and its long-term nature as a phenomenon. She also highlighted decentralization as the primary difference between cryptocurrencies and digital currencies of the central bank.

Electronic trading platform Robinhood launches its own crypto wallet and also starts providing cryptocurrency storage services similar to Coinbase. More than 300 thousand people have registered for limited testing of new functions, which starts in October.

NFT

In accordance with the Nansen analytical services, NFT trading volumes over the past week are still several times less than the August highs. Nevertheless, capitalization indicators do not fall and periodically show sharp upward movements, which allows us to conclude that there are no speculative sales and a trend towards long-term storage of objects purchased earlier by NFT.

Talking about trading volume, Art NFT’s leadership of the Crypto Punks collection is not in doubt: capitalization has grown by 20% over the week and is about 1 200 000 ETH, while its closest competitor, BoredApeYachtClub, has 433 478 ETH. New issues of NFT tokens also attract the attention of traders and collectors.

Similar to last week, apart from Crypto Punks, the Art Blocks collection (0xa7d8) was under projector — they both occupy the leading positions. Behind them, NFT Cool Cats, a collection dedicated to “cute cats” with various accessories, unexpectedly takes third place.

According to the weekly influx of subscribers to accounts associated with NFT on Twitter, no changes have been observed. OpenSea continues to maintain a strong lead. The second wave of grabbing attention is fading, but interest rates are still well above summer levels.

The open interest volume for options expired on December 31 increased by 8.5% to 59 131 BTC. The funds increase was distributed more or less evenly between Call and Put options. The main funds increase levels for Call were 60 000, 80 000, and 100 000. For Put, the range is 22 000–30 000.

Open interest at the end of the first quarter (March 25, 2022) increased by 12%, and currently is 12 048 BTC. The equilibrium price between Put and Call options is still at 50 000. The main levels for Put options are 20 000, 25 000, 30 000. For Call options — 50 000, 70 000 and 100 000.

The volume of general interest on all execution dates decreased by 22.4% to 136 687 BTC. The ratio of Call and Put options trading has shifted slightly towards the latter. The most popular strike is still at the 100 000 point.

The volume of open interest for options with the expiration date on December 31 increased by 5.1% and is 485 332 ETH. The 5 000 point remains the most popular strike price despite market turbulence.

The volume of open interest at the end of the first quarter increased by 5.3% and is 164 848 ETH. The gap between the volume of Call and Put options has narrowed slightly, but is still impressive: Call is 4.4 times larger. Growth expectations are still strong.

The total size of all traded options decreased by 18.4% and is 1 125 390 ETH. The main concentration level of traders’ interest is at around 2000 and 2500 for Put options, 4000 and 5000 for Call options.

PRO MODE

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

Last week’s volatility was at its maximum monthly levels, which was reflected in the dynamics of trading in short and medium-term options. The number of put options with the execution date in around a month continued to increase, not as fast as a week earlier though. Among the various closest execution dates, the major levels were 20 000, 40 000, and 42 000.

MarkIV for long term BTC options

In the long-term perspective, the current surge in volatility did not have any impact on trading dynamics. Despite the fact that the past week was quite active in terms of trading, the main rise in the volume and number of deals came in medium-term options.

MarkIV for short term ETH options

Short-term curves of the ratio of options baskets reacted to the decline quite sensitively, in contrast to the medium-term — where the impact of price changes was not so notable. In the frame from 1 week to 1 month, the growth dynamics of put options increased significantly — they accounted for about 40% of trades. Traders are actively insuring against a possible fall by buying combinations of put spreads between the levels of 2000 and 3000 (I am afraid of a short-term decline below the upper mark, but hope that the rate will not be below 2000)

MarkIV for long term ETH options

In the long-term perspective, the ratio between put and call options has remained almost unchanged — at the moment there are no global factors that could affect the overall positive assessment of the market. The trading is dominated by the risk of reversal and call spreads on the upper range, especially for options with an execution date on December 31 and in the end of March.

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