Market Update 12/01

MARKET OVERVIEW

Is Bitcoin unbothered by Binance settlement - Bitcoin and Ethereum are holding well in the wake of the Binance settlement, with BTC trading above 200 moving average of $37,546 ($28,777) as well as ETH of $2,032. The BNB coin, continues to show weakness, as Binance centralized exchange is facing grave uncertainties heading into the holiday season, with BNB coin trading at $227, relatively flat over the past 30 days.

We view BNB coin as the proxy for the overall crypto-market sentiment, remaining cautious as we approach the holiday season, and something closely to follow.

This past week, Cardano founder Charles Hoskinson, sounded off on SEC For giving Bitcoin unfair free pass while Cardano, others face regulatory scrutiny. In a recent podcast, Hoskinson talked: “Explain to me the f****ng difference between Ethereum, Bitcoin, and Cardano, and the rest of the gang. Explain it to me. Like I’m five years old. Right now. Run the goddamn Howey test on it. Show me the difference between the two. Tell me”. Hoskinson pointed out an expectation of profit from BTC investments by “orange pill moon boys”. He also questioned Bitcoin’s decentralization, arguing that the ascendant crypto is not as decentralized as many believe. “If you subpoena about three different entities [the largest mining pools], you could perform a 51% attack on Bitcoin because that’s the way the hash power works. But it’s decentralized. And team orange get a complete [free] pass. It’s a pathetic f*****g joke.”

A full Hoskinson interview you can see here on the Crypto Megan channel.

Binance's new CEO Richard Teng published his first blog: "As an industry, we require more focus than ever on collaborating with policymakers. We usher in the next phase of Binance's responsible growth. My commitment is to work tirelessly so that we can meet and exceed the expectations of all stakeholders while achieving our core mission: the freedom of money." You can see a full blog post here via the following link. It's worth noting that Richard Teng has been with #Binance since '21 and we are sceptic of the proposed regulatory shift, having overseen their compliance and the (lack) of reporting standards for 2 years.

Teng also noted Binance’s proof of reserves system and 1:1 backing for user assets. However, many have criticized these measures which fail to reveal audited fiat reserves, client and company liabilities and other information to assess a firm’s financial health.

The Cosmos ecosystem, voted on the proposal 848, that divided ATOM cryptocurrency community over their token inflation policy. ATOM holders recently voted to reduce the inflation rate on the Cosmos Hub from 20% to 10% by voting “Yes” to Prop 848. 41.1% voted in favor 38.5% voted against and 20.4% abstained. The “No” voters are now forking the Cosmos Hub into a new chain called AtomOne, led by Cosmos founder Jae Kwon.

Cryptocurrency total market capitalization remained stable to $ 1.41 trillion. For the week ending on December 1st - Bitcoin (resistance) $38,280 and (support) $36,894 and Ethereum $2,127 (resistance) and $1,993 (support). Bitcoin daily volume on the day is $ 19.46 billion (2.63% of MC) and Ethereum daily volume $ 8.63 billion (3.53% of MC), as it appears liquidity is falling in the wake of Binance uncertainty. BTC and ETH total market capitalizations are equaling $735 billion and $244 billion: remaining steady as BTC/ETH 3.0095x ratio a slight increase from 2.9381x ratio on 11/24. Bitcoin dominance saw a slight uptick to 51.35%.

Crypto market usually trades well in the bull-market, carrying its momentum.

BITCOIN DERIVATIVES

The Futures Markets on CME turned to December contract of price $ 37,970 and the trading volume of of 4,584 contracts (Ticker: BTCX3). The aggregate CME Open Interest volumes are currently at 21,685, a net change from yesterday of -1,342. The weekly CME Option Markets for the past 7 days have (35) Puts and (27) Calls and total volume of (52) Options.

The futures curve for ME December ($38,065), January 2024 (+ $430) and February 2024 (+ $735) and March 2024 (+ $1,020) trading in slight contango. Bitcoin futures, volume for the week ending on December 1st, 2023, is similar to 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 December 1st.

#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 $37,700 is in well below the ADL line $ 38,400 that suggests that traders are accumulating Bitcoin ahead of the holidays season, and possible BTC Spot ETF approval.

The AD line ADL (Accumulation Distribution Line) is a volume based indicator which was essentially designed to measure underlying supply and demand. It accomplishes this by trying to determine whether traders are actually accumulating (buying) or distributing (selling), 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 December 1st has SR of 0.21 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. Comparing to a Bitcoin gain of 1.48%, Ethereum lost 0.56% ending at 0.0540 per coin, a fall from 0.0552 on the trailing 7 days ago, underperforming BTC some 100 basis points over the past 7 days.