Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Market commentary
Good Morning!
One week after the launch of the first US Bitcoin ETF (BITO), Bitcoin is now trading at USD 61,669 (8% below the all-time high). This is following Direxion’s announcement to launch a Short Bitcoin Futures ETF. By the way, the Securities and Exchange Commission (SEC) has not yet weighed in on this follow-up, and has 75 days to respond before Direxion’s ETF would automatically go into effect.
El Salvador bought the Dip
On Wednesday, El Salvadorian President Nayib Bukele tweeted that his government had “bought the dip” (slang for buying during a correction) adding an additional 420 BTC to its treasury, which is equivalent to roughly $25 million.
A total of $3.1 billion of BTC options are set to mature today, which, too, could be a source of volatility. Open interest profile shows a major interest towards calls, and given today’s expiry, this influences the short-term view. Currently, the top volume contracts have been around the $60,000 strike price.
Ethereum all-time high
Also, Ethereum (ETH) just hit a new all-time high (of around $4,399), and over the past 24 hours, it is up roughly 9.3%, extending its outperformance versus Bitcoin (BTC). Since BTC ETF is built using CME futures, there is some speculation about the likelihood of an ETH ETF following soon. This is supported by the fact that ETH futures are also live on CME. Traders have therefore started to speculate on higher ETH prices.
The ETH options market is much thinner than that of BTC, and, therefore, any meaningful flows can quickly move the volatility space. All skews are below par, with longer maturities reaching +20pts for calls vs puts. ATM implied volatility is trading significantly above realised volatility. Option flows are “paying up”, essentially betting that ETH will move explosively higher in the future.
Meme coins are back
Then we have the meme coins: they have been in the spotlight, with Dogecoin (DOGE) hitting a two-month high, and Shiba Inu (SHIB) being up 124% for the week. It is now actually competing for the ninth spot on the list of top digital assets by market capitalisation.
Polygon (MATIC) is back in the game, too, riding the rumours of Coinbase building its native NFT marketplace on the Polygon platform. So far, there are no confirmations as to which network might be chosen to build the NFT market for one of the leading crypto brokerages. The music is starting to play for many other coins as well. So, get ready for some price movements.
Happy Friday, and Happy Trading!
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