Market Update 10/06

MARKET OVERVIEW

Uptober (terms used for a strong start to October), started on a good note, as the leading cryptocurrency pair Bitcoin rallied ~ 4% and Ethereum ~0.5% on the 7 days basis, with trading volumes remaining subdued over the period. The two major cryptocurrencies Bitcoin (resistance) $27,950 and (support) $26,895 and Ethereum $1,665 (resistance) and $1,625 (support). Bitcoin daily volume on the day is $10.9 billion and Ethereum daily volume $ 4.7 billion, traded in their native coins / tokens USD equivalent. ETH daily volume fell by about 50% from the previous week, with BTC market capitalization equaling $545.6 billion and $197.6 billion: indicating 2.762x ratio, increase from 2.652x ratio on 09/28.

BTC outperformed ETH some 4.25% for the 7 days ending on October 6th 2023.

Highlights for the week include new Ethereum based futures exchange traded fund being launched by ProShares, VanEck and Bitwise, among others, a combined eight funds. VanEck Ether-Futures ETF saw extremely low volumes of some $2 million in AUM traded on the daily basis. VanEck tweeted a funny statement "low volume just like your jpegs".

Also, a long awaited court case against former FTX Exchange founder, Sam Bankman Fried started on Tuesday 10/03, with the judge selecting a jury of 11 people that will determine fate of the former crypto aficionado. The main stream media is reporting that to some, the trial of Sam Bankman-Fried has become by proxy a trial of the whole crypto industry following the excesses that led to last year’s crash.

Additionally, The U.S. Department of Justice cracked down on another network of suppliers of fentanyl ingredients, going after a lengthy list of Chinese firms and employees in an alleged syndicate they say operated in Florida. Chain Analysis reported that a number of wallets using USDT (Tether) stablecoin over the Tron blockchain is flagged for transactions and payments.

The Futures markets on CME had a daily Open Interest 11,250 contracts for October, price of $27,820 and are trading in slight contango, with the term structure showing a spite of optimism. The largest CME contract saw volume of (5,521] for month end October, and a somewhat tepid demand is reflected by the flat futures curve with ME November (+ $175), December (+ $310) and January (+ $535).

Bitcoin futures, Volume and Open Interest for the week ending on October 2023, is slightly lower than for August 2023.

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c1 Bitcoin (trailing) 180 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 October 6th.

#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 trailing 6 months - Bitcoin ADL equals near $ 30 000 , higher than the current spot $28,985 suggesting buying accumulation and near term bullishness.

○ 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 October 6th has SR of +0.80 reflects positive risk adjusted returns, comparing to last week of +0.25.

#Ethereum
○ $BTC / $ETH ratio broke out against the resistance level for the period of trailing 7 days, with ETH trading down on the week at 0.05869 down from 0.06125 per BTC. Ethereum fell 4.2% over the past 7 days, with uncertainty surrounding the crypto markets, Bitcoin remains the king. Proof of Work digital assets are still seeing robust demand.