Market Update 02/02

MARKET OVERVIEW

The Federal Reserve remains Hawkish - The FED has decided to keep the rates on hold, surprising many as the TradFi capital markets took the news on sour tongue, and financial assets took a dive with across the board sell-off, including Bitcoin. Fed held the rates steady, with the benchmark interest rate between 5.25% and 5.5% — the highest in over two decades — FOMC meeting concluded after (2) days off deliberations indicating it is not ready to start cutting.

CryptoCon published a neat research article on Bitcoin cycles that you can reference here, suggesting that Sine Waves have predictable powers in explaining cryptocurrency market valuation changes charted against Proof Of Work mining 'halving' schedule.

A recent re staking palooza via Eigen Layer (Cosmos interoperability chain) on $ATOM cryptocurrency, has accrued some 1 billion in deposits leading with Either Fi, Kelp DAO, Renzo, Eigenpie, Bedrock in that order accounting for 48% / 25% / 16% / 8% and 3% of the total allocation. These tokens are collectively known as LRT or liquid restaking tokens.

Tether, a largest USD stablecoin by assets has published their Q4 '23 Attestation Report that you can reference here. with 91.597 billion in $USDT token liabilities, and 91.6 billion in assets broken down by holdings in US Treasuries, Bitcoin, Gold and others ($80.3 B, $2.8 B, $3.5 B and $5.5 B). It is worth mentioning that Tether has an undisclosed $4.8 billion Unsecured Loan, from an unknown entity likely tied to Bitfinex Exchange market making activities, from which they claim to have excess reserves for the match of ALM (asset liability management). Please not that Tether Ltd. a holding company of iFinex Inc. is not audited, but rather receives a 'qualified opinion' from BDO Consulting.

Kaiko Data has published a relevant tweet, Binance Exchange has recovered to claiming 50% of the total share of total share volume for all cryptocurrencies. 'Two months post-settlement with the US Justice Department, Binance's market share has rebounded to nearly 50%. Volumes were boosted by December's zero-fee promotions and the ETF hype', that you can reference here.

Cryptoken Board UÜ DeFi project Synthetic Chain DAO (IP Synthetic Exchange) has rebranded with new UX / UI for the upcoming release of the prediction market token and $CRT-QRC20 collateral liquidity pool, that you can see here.

Solana decentralized exchange, dubbed Jupiter - has release their token airdrop (Ticker: $JUP) one of the biggest token airdrops ever on the SOL blockchain appeared to execute largely without major issues on Wednesday with the chain staying upright as Jupiter started distributing roughly $700 million worth of its JUP token to nearly a million wallets. Most of the rewards were distributed to the validator nodes.

NFT sales and trading volume data by CryptoSlam, indicates that Ethereum based NFT wash trading volume equals approximately 40% of total trading volume. Polygon $MATIC ranks second highest with 30% of total volume coming from wash trading. A full tweet by CB you can reference here.

BTC and ETH total market capitalizations equal $ 824 billion ( $21 billion increase) and $ 272 billion ( 2 billion increase), as BTC/ETH 3.0302x ratio, from 2.9873x ratio on 01/26. Ethereum under-performed against Bitcoin for the past 7 days by ~ 2.66% percent. The total market capitalization of the cryptocurrency market is $ 1.63 T ( $.07 T increase ), and BTC dominance at 50.90% from the previous week.

BITCOIN FUTURES

The Futures Markets on CME had a closing price of $ 42,345 and trading volume of of 1.930 contracts for February contract (Ticker: BTCG4), with traders continuing to reduce their positions in the post Bitcoin ETF era. The aggregate CME Open Interest are currently at 20,519 with a net change from yesterday of 416.

The futures curve for ME February ($42,815), March 2024 (+ 365), April 2024 (+ $685) and May 2024 (+ $955). Bitcoin futures, total volume for the week ending on February 2nd, 2024, is lower than comparing to the previous week at 6,785 contracts, trading in slight contango.

BITCOIN OPTIONS

Deribit Bitcoin Options call / put ratio is 0.57, with Call Options OI of 156,373 and Put Options OI of 67,614. The two large call option strike price are $45,000 and $50,000, while the put option strike price is more evenly distributed between $30,000 - $40,000. The largest options contracts by expiration are February 23rd, and March 29th and June 28th 2024.

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c1 Bitcoin (trailing) 30 days

c2 BTC/ETH (trailing) 7 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 February 2, 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 30 days - Bitcoin ADL of $46,811 is higher than the market price $ 41,138 that suggests that Bitcoin traders are either wrong about the sustainability / strength of the price rally, or still accumulating.

The ADL 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 February 2 has SR of 1.06 for the past 30 days, down from 2.17 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 7 days Ethereum has under performed BTC by 2.52% and on lower trading volumes, ending at 0.0539 per coin, increase from 0.0553 from the 7 days ago. For the past 7 days ETH has under performed BTC, perhaps performance indicating more weakness for the second leading crypto by the market capitalization.