Market Update 01/05

MARKET OVERVIEW

Happy New Year '24 - The 2024 cryptocurrency market has started off with a bang, Bitcoin has tested 360 day valuation highs, rallying to $ 45,000 per coin and $ 850 trillion valuation before retreating mid-week to $ 43,250. If the U.S. Securities and Exchange Commission does as expected and approves bitcoin ETFs from a dozen or so firms in the next few days before the January 9th deadline, it will be interesting to see how the market sentiment changes.

Cryptoken Board has published a research article on the global ETPs, in order to provide some context on the crypto fund flows- presently Bitcoin exchange traded products have accumulated $ 4.5 billion in assets under management, rallying to $8 billion total AUM with a recent BTC price increase. You can reference our full research via Medium channel here, including ETP breakdown by issuer, AUM and Corporate Treasury holdings here. We are expecting ETF subscriptions, but with somewhat tapered enthusiasm in the amount of $500 million, and low trading volume not billions of dollars as suggested by some of the other crypto media outlets.

Crypto-Perpetuals for altcoins have deleveraged on January 3rd as viewed by market basis trading, that is represented by a level of funding rates underpinning perpetual contracts and ROI (profitability), which have accrued large amount of leverage according to data by CoinGlass. The market pull-back, was a result of arbitrage trades closure, with over $500 million in liquidations taking place during the price drawdown from $45,000 briefly to $40,000, that happened on Jan 3rd. You can reference Cryptoken Board tweet here and read a full thread on X platform here explaining a difference between the spot prices and perpetual prices, that are named basis exposure.

The Federal Reserve Open Market Committee minutes were published from their meeting in December, board members have agreed on reducing the Federal Funds Rate by an expected 75 basis points and (3) rate cuts, however there still appears to be some uncertainty in the monetary policy as the inflation remains sticky. 'Markets had widely anticipated the decision to stay put, which could end a cycle that has seen 11 hikes, pushing the fed funds rate to its highest level in more than 22 years' per CNBC, via Cryptoken Board tweet here.

Cryptoken Board has updated our Price to Sales blockchain model, for January 2024 that reminiscent to TradFi, reporting on a price of coin / token per each unit of blockchain revenue, a helpful investment metric that allows us to "comp" all of the leading cryptocurrency networks based on their profitability. Price To Sales Ratio (P/S) Valuation metric by Blockchain 01/03 1:35 UTC #Uniswap $UNI 35x, $Aave 41x, #Curve $CRV 46,x #SushiSwap $SUSHI 60x, $GMX 60x, #MakerDAO $MKR 140x, #Arbitrum $ARB 203x, #Synthetix $SNX 310x, #Optimism $OP 588x, #Ethereum $ETH 913x, #Bitcoin $BTC 2 558x, #Polygon $MATIC 3 331x, and #Solana $SNX 35 230x. You may reference our X platform post here.

Bitcoin mining stocks as well as Coinbase, have retreated, experiencing pressure from the upcoming ETF Wall Street announcement, as other investment vehicles are becoming a viable investment product alternative as opposed to investing in miners and the public exchanges like $COIN. Coinbase has retreated from 12 month high of $186 per share, to $156 per share, and Hive Technologies a lobal miner power'd by renewable resources has retreated from $7.57 per share to $5.75.

To close 2023 - Cryptoken Board has written a one line thread, 'Year in Review' highlighting some of the most prevalent ecosystem developments and sentiment takeaways that you can reference on X platform here.

Cryptocurrency total market capitalization has increased to $ 1.64 trillion. For the week ending on January 5th - Bitcoin price closed lower from the 7 day resistance level of $45,368 and (support) $40,814. Ethereum token also tested 7 day resistance level high of $2,425 and $2,125 (support), experiencing high volatility as market deleveraged. Bitcoin daily volume on the day is $ 32.1 billion (3.89% of MC) and Ethereum daily volume $ 12.6 billion (4.73% of MC), a significant increase in trading volume as the market looks to rebound from a mid week drawdown.

BTC and ETH total market capitalizations equal $ 849.1 billion (- $12.2 billion decrease) and $ 269.3 billion (- $2.5 billion decrease), as BTC/ETH 3.1579x ratio, decrease from 3.1771x ratio on 12/25. Bitcoin dominance continued with + half of the entire market capitalization 50.02%.

BITCOIN DERIVATIVES

The Futures Markets on CME had a closing price of $ 43,760 and trading volume of of 2,581 contracts (Ticker: BTCF4), with traders coming back from the holiday with higher volume than month end December. The aggregate CME Open Interest volumes are currently at 23,087 with a net change from yesterday of -1,858. The weekly CME Option Markets for the past 7 days had the same amount of Bitcoin Options with (102) $47,000 Calls and (110) $38,000 Puts and total volume of total (204) Options for January.

The futures curve for ME January ($43,080), February 2024 (+ 440) and March 2024 (+ $805) and April 2024 (+ $975) trading relatively flat. Bitcoin futures, volume for the week ending on January 5th, 2024, are higher than comparing to previous week.

Share on
Crypto Twitter

c1 Bitcoin (trailing) 30 days

c2 BTC/ETH (trailing) 14 days

TECHNICAL ANALYSIS

The volume adjusted indicators for BTC cryptocurrency, including Accumulation Distribution Line and the Sharpe Ratio, including BTC/ETH ratio are reported on chart 1 and chart 2 for week the ending on January 5th, 2024.

#Bitcoin
○ A/D Ratio - Accumulation Distribution Indicator or ADL (Accumulation Distribution Line) is a volume based indicator that aims to measure the underlying buying / selling pressure by combining money index multiplier with traded volume. For the period of trailing 3 months - Bitcoin ADL of $45,886 is higher than the market price $ 43,345 that suggests that Bitcoin traders are accumulating.

The AD line ADL (Accumulation Distribution Line) is a volume based indicator which was essentially designed to measure underlying supply and demand. It accomplishes this by trying to determine whether traders are actually accumulating (buying) or distributing (selling), so ADL can reveal divergence between volume flow and the actual price.

○ Money Index Flow (31 day)- or The Money Flow Multiplier is determined by the relationship between a period’s closing price and the period’s high/low range, adjusted for 31 days, trailing. For this week, we're not reporting MIF.

○ Sharpe Ratio (31 Day) - The Bitcoin SR is the performance adjusted return for the risk free rate (5%) / divided by the standard deviation of return for the period. The week ending in January 5th has SR of 0.49 for the past 30 days, down from 1.99 in the previous week. Please note that Sharpe Ratio take into account volatility in the denominator, even as we see spike in BTC price, so does a level of risk.

#Ethereum
○ $BTC / $ETH (inverse quotation) for the past 14 days Ethereum has outperformed BTC by 1.32% and on lower volatility. Even though Bitcoin gain of 1.55%, Ethereum dropped -6.00% ending at 0.05159 per coin, a decrease from 0.05089 from the 14 days ago. For the past 7 days BTC during a sudden drop and deleveraging, BTC outperformed ETH 750 basis points.