Market Update 11/24

MARKET OVERVIEW

Crypto markets have changed forever - what might be the biggest news since the crypto dawn and Centralized Exchanges, Binance - the founder and chief executive officer Changpeng Zhao "CZ" has pleaded guilty to settle US illicit finance probe sought after the US Department of Justice, in violation of US Bank Secrecy Act and AML compliance. CZ will step down from his role of the lead executive, leaving much to ponder as the future of cryptocurrency markets and market making starts to wobble. Binance statement can be found here.

Additionally, the Securities and Exchange Commission sued this past week Kraken crypto exchange over failure to comply- an another leading centralized exchange which it accused of illegally operating as a securities exchange without first registering with the regulator - naming various digital assets such as Cardano (ADA) and Solana (SOL), among other cryptocurrencies, as securities. In response to the SEC's lawsuit alleging unregistered securities exchange operations, Kraken CEO Dave Ripley took to X / Twitter that you can read here to assert the company's position. Ripley vehemently disagrees with the SEC's claims, emphasizing that Kraken does not list securities.

You can read a full statement on the SEC action against Payward Inc. and Payward Ventures Inc., together known as Kraken here.

However, despite what might be now an insidious cloud hovering over the digital assets, for years to come really, the two leading cryptocurrencies Bitcoin and Ethereum are trading near their 30 day resistance levels of $ 37, 194 and $2,057. It is worth mentioning that over the past few days some 1 billion of assets have been removed from Binance, truncating much of the market depth (estimated amount is 25-35% for the leading pairs) as reported by Kaiko Data that you can see here.

Decentralized Market Maker - by Ethereum Uniswap (Ticker: UNI) has rallied on the back of the negative news surrounding CEX leadership, rallying from $ 4.20 to $ 6.30 over the past 30 days and some 50% in total. We believe this is due to a great uncertainty of centralized exchanges operating as de-facto brokerages, dealers, and clearing agencies - will the crypto industry be migrating en-masse to more decentralized platforms including Thorchain, Uniswap, Komodo Wallet, Atomic Wallet among others ? There is also a gap with derivative service providers as Paradigm (Co) does not serve US clients.

Cryptocurrency total market capitalization increased to $ 1.42 trillion. For the week ending on November 24th - Bitcoin (resistance) $37,500 and (support) $35,800 and Ethereum $2,080 (resistance) and $1,933 (support). Bitcoin daily volume on the day is $ 20.82 billion (3.20% of MC) and Ethereum daily volume $ 10.60 billion (4.50% of MC), with what might appear as permanently reduced liquidity. BTC and ETH total market capitalizations are equaling $726 billion and $247 billion: remaining steady as BTC/ETH 2.9381x ratio a slight increase from 2.9372x ratio on 11/17. Bitcoin dominance saw a slight uptick to 51.42%.


BITCOIN FUTURES

The Futures Markets on CME is now seeing a much lower trading volume of of 1,572 contracts (some 65% fall from a week ago), price of $37,210 for the month end November (Ticker: BTCX3). The CME Bitcoin futures drastic fall in an amount of contracts traded is relatively concerning, with Binance leadership demise and Kraken SEC lawsuit. The aggregate CME Open Interest volumes are currently at 22,543 (CME Group’s Exchange Daily Equities Volume and Open Interest Report summarizes Equities futures and options volume for Globex, Clearport/PNT and Open Outcry. Volume figures include S&P, Nasdaq, Russell and Dow Jones to give you updated insight into index exposure.)

The futures curve with ME November ($37,665) December (+ $675), January 2024 (+ $1,235) and February 2024 (+ $1,590), trading in contango and possibly be telling of Bitcoin ETF pending approval coming in the new year. Bitcoin futures, volume for the week ending on November 24, 2023, is higher than of the previous week.

Share on
Crypto Twitter

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 24th.

#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 $37,210 is in slightly above the ADL line $ 37,006 that might suggest that traders are presently fairly valuing Bitcoin as we head into December '23. 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 24th has SR of 0.66 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) is trading in line for the past 7 days, relatively in-synch as we can tell per the chart above. Comparing to Bitcoin gain of 1.80%, Ethereum gained some 2.60% ending at 0.0553 per coin, a slight increase from 0.0549 on the trailing 7 days ago, outperforming BTC some 75 basis points.