Market Update 10/20

MARKET OVERVIEW

Another week ending on October 20th, the cryptocurrency markets have spiked above the 200 moving average, of $28,000. Cointelegraph inaccurate announcement of spot Bitcoin ETF being approved, gaslighted a rally - what might simulate a bullish response of an exchange traded (public) product finally being approved by the Securities and Exchange Commission. Presently, the SEC is reviewing 8 to 10 filings per the recent interview by Chairman Gary Gensler that you can watch here.

For the week, Bitcoin, along with Solana rallied the most with BTC spiking 7.90% and SOL 15.00%. Ethereum remained relatively flat for the week surprisingly on the 7 days basis, with trading volumes being elevated during the initial rally. The two major cryptocurrencies Bitcoin (resistance) $28,75 and (support) $26,650 and Ethereum $1,600 (resistance) and $1,545 (support). Bitcoin daily volume on the day is $12.5 billion and Ethereum daily volume $ 4.48 billion. BTC and ETH total market capitalizations are equaling $558 billion and $187 billion: indicating 2.9825x ratio, increase from 2.8289x ratio on 10/13. BTC outperformed ETH some 6.00% for the 7 days ending on October 20th 2023. Bitcoin dominance continuous on the news of a possible publically traded product approved.

Cryptoken Board research team has published a comprehensive report on Ethereum staking, including data breakdown by the service provider topology such as Centralized Exchanges, Liquid State Derivatives and Staking Pools that you can read here. A biggest take-away is that Coinbase and LIDO Finance now account for whooping 60% of the ETH deposits for staking purposes, likely due to a fact that LSD market is presently offering higher yields than spot Ethereum via cbETH and stETH - LSD. We must remind everyone that the SEC has filed a motion against Coinbase in June 2023 - claiming that their product Staking as a Service offers a sale of unregistered securities, likely casting cloud of uncertainty over the ETH market.

BITCOIN FUTURES

The Futures Markets on CME had a daily Open Interest (totals) 11,830 contracts, price of $28,620 for month end October and continue to trade in slight contango, with the term structure showing optimism. The aggregate CME contract volumes for the remainder of 2023 are 15,799 contracts with the futures curve with ME November (+ $190), December (+ $300) and January (+ $515). Bitcoin futures, Volume and Open Interest for the week ending on October 2023, is higher than on September 2023 with a big spike on the amount of contracts traded on October 16th.

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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 20th.

#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 3 months - Bitcoin ADL is quite below the current price $ 28,699 , indicating that AD Ratio of $ 25,565 might suggest overbought territory. The traders are quite possibly distributing (selling), so ADL can reveal divergence between volume flow and 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 October 20th has SR of 2.65 reflecting positive risk adjusted returns for trailing 30 days, comparing to last week SR of -3.75.

#Ethereum
○ $BTC / $ETH ratio reached another low for this week, with ETH failing to keep up with BTC rally. Ethereum fell mid-week around October 16th, when the Bitcoin futures markets saw a spike in the number of contracts traded, indicating more bullishness for Bitcoin than Ethereum in the near term. ETH is trading down on the week at 0.05544 down from 0.0579 per BTC. Ethereum fell near 6.00% over the past 7 days.