Market Update 11/17

MARKET OVERVIEW

Bitcoin and Ethereum choppy week - BTC and ETH, continue to test 2 year highs, however over the past 7 days saw we saw a swing of 6 percent on the downside to $35,350, before rallying back full 7 percent, spike to reach a year to date, high of $37,750 before retreating yet again. Presently, Bitcoin has settled above $36,700, trading on 'hopium' of a possible Spot ETF Bitcoin approval (s), with BlackRock Asset Management filing in Delaware an Ethereum exchange traded fund. Notably, Solana blockchain, that is seen as a low fee - scalable application layer 1 alternative for building decentralized applications is on hot streak, accumulating a whopping 275% over the past 30 days to reach $63.10 per token. Solana is currenlty ranked #6 crypto, with $26.4 billion MC.

Notable, we had an appearance in the media where Ark Invest CEO Cathie Wood applauded Solana performance this year on CNBC's show "Squawk Box" on Tuesday, she stated that “Ether was faster and cheaper than bitcoin [back] in the day – that’s how we got ether. Solana is even faster and [more] cost-effective than ether,” Wood said.

The US lead exchanges, our team has published this report, that you can reference here, are indicating that the trading activity is mostly taken place on the US based exchanges like Coinbase and Kraken, accounting for over 80% of the BTC and SOL volume. Kaiko Data also corroborated SOL CVD (cumulative volume delta), suggesting that Coinbase and Kraken have lead the Solana rally.

Tether (Ticker: USDt) is presently winning a war of stablecoins, with $ 86 billion of assets under management, providing a payment solution on over (15) disparate blockchains, comparing to Circle Inc. USDc, that presently has 24.1 billion tokens in circulation. Tether backing of 1 to 1 USD, a long debated issue, has recently won a legal case versus couple of the plaintiffs pursuing a lawsuit that Tether Ltd. accusing the 'companies of misleading consumers about the properties of Tether’s stablecoin USDT and falsely disclosing information about its reserves.' Essentially, the lawsuit argued that the stablecoin was not backed 1:1 as the companies claimed. The plaintiffs, who purchased USDT in 2019, claimed they would not have done so had they known the representations were false.

Cryptoken Board, also published a report here, implying that 6% of the Tether Limited collateral backing comes from 'secured loans' with their Q3 attestation report stamped by BDO Consulting. Tether USDt is widely used for market making for cryptocurrencies on the Centralized Exchanges, representing a systemic risk to all cryptocurrencies, in case it falters.

Cryptocurrency total market capitalization increased to $ 1.36 trillion. For the week ending on November 17th - Bitcoin (resistance) $37,750 and (support) $35,360 and Ethereum $2,120 (resistance) and $1,940 (support). Bitcoin daily volume on the day is $ 29.75 billion and Ethereum daily volume $ 14.50 billion, falling along with the mid-week price correction, before increasing again. BTC and ETH total market capitalizations are equaling $714 billion and $243 billion: remaining steady of BTC/ETH 2.9372x ratio a slight increase from 2.9355x ratio on 11/10. Bitcoin dominance fell to 51.28%, likely due to a Solana price action.


BITCOIN FUTURES

The Futures Markets on CME had a higher total volume of 5,020 contracts, price of $36,680 for the month end November (Ticker: BTCX3) as BTC futs recalibrated to higher prices, but still experiencing a slight contango term structure. The aggregate CME Open Interest volumes for the remainder of 2023 is 22,723 (+1,523) DoD increase. The futures curve with ME November ($37,995) December (+ $745), January 2024 (+ $925) and February 2024 (+ $1,105) . Bitcoin futures, volume for the week ending on November 17 2023, is about the same for the last 7 days as the previous week.

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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 November 17th.

#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 price of $36,190 is in equilibrium now with the ADL line $ 35,393 that might suggest that traders selling Bitcoin comparing to the current spot price of $36,700. The traders are possibly distributing (selling) or accumulating (buying) at these higher valuations, 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 November 17th has SR of -1.90 for the past 30 days. 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) favoured ETH this past weekend, and then pared back some of the gains as of late. For the past 7 days Ethereum token added 2.47% comparing to Bitcoin loss of 3.00%, ending on 0.0552 per coin, a slight increase from 0.0524 on the trailing 7 days ago, outperforming BTC some 5.35% in the past week.