Market Update 09/22

MARKET OVERVIEW

The week of Sept 22nd ended with subdued volume, the two major cryptocurrencies Bitcoin and Ethereum trading in the narrow range of (L) $26,620 <-> (H) $27,300 and (H) $1,620 <-> (L) $1,570, failing to break from support / resistance levels.

BTC rallied on the week 2.5% before it pared back the gains, while ETH fell 5%.

The crypto markets continued to trade in choppy waters, with reduced volatility engulfing most of trading pairs including the large caps (+ 1 billion $USD) and mid-caps (+ 500 million $USD). Total market capitalization reached $1.08 trillion, with Bitcoin dominance continuing to gain momentum, nearing some 50% of the total market capitalization to 49.20% , outperforming most coins / tokens on the YTD basis. With the exception of few altcoins, Bitcoin remains the number one digital asset for investors, retail and institutions alike.

The Futures markets are presently trading in slight contango (a situation where the futures price of a commodity is higher than the spot price), with a term structure indicating near term diminished bullishness for Bitcoin. The largest CME contract saw volume of (3,288 BTC] for month end September, and a somewhat tepid demand is reflected by the flat futures curve with ME Sept ($26,660), Oct (+ $205), Nov (+ $420) and Dec (+ $805).

The open interest for the week ending on Sept 22nd, is lower than for August 2022.

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c1 Bitcoin (trailing) 60 days

c2 BTC/ETH (trailing) 30 days

TECHNICAL ANALYSIS

The volume adjusted indicators for BTC cryptocurrency, including Accumulation Distribution Line, Money Flow Index and the Sharpe Ratio, including BTC/ETH ratio are reported on chart 1 and chart 2 for week the ending on Sept 22nd.

#Bitcoin
○ A/D Ratio - Accumulation Distribution Indicator or ADL (Accumulation Distribution Line) is a volume based indicator which was essentially designed to measure underlying buying / selling pressure. The week ending in Sept 22nd we combined negative money index multiplier with the traded volume, indicating a selling pressure and falling ADL to below the $25,550.

○ Money Index Flow - 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. The week ending in Sept 22nd, MIF fell to 38%, indicating a falling trend as well.

○ Sharpe Ratio - The SR adjusted for 31 days, for Bitcoin 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 Sept 22nd has SR of -2.45 reflecting negative risk adjusted returns.

#Ethereum
○ $BTC / $ETH ratio broke a resistance level for the period of trailing 30 days, with ETH trading at 0.06 per BTC. Ethereum lost 5.5% over the past 30 days, likely indicating risk off market momentum, and falling appetite for digital assets overall.