An overview of the trading activities on the cryptomarkets. Studies on traded volumes, supply and demand situations, as well as periodic technical analysis of the most important crypto-currencies and indices, including the perspective of professional Traders.
Technical Analysis
Good Morning!
At the time of writing, Bitcoin (BTC) is trading at $38,400 (-13.57% in 7 days), Ethereum (ETH) is trading at $2,530 (-14.97% in 7 days), the Ethereum vs. Bitcoin (ETH/BTC) spread is trading at 0.0658 (-1.69% in 7 days), and Solana (SOL) is trading at $83.15 (-15.73% in 7 days).
Macro uncertainty
As price actions are driven by macroeconomic factors, the global economy is leading to stagflation: a time of slow economic growth and rising inflation.
- Rising Commodity Prices: Crude Oil $120+, Gold above $2,000 / oz, etc.
- The CBOE Volatility Index (VIX) is trading at $36.46 (+57% in 1 month)
- EUR / CHF reached 1 for the first time since peg removal in 2015 (-9% in 1 year)
Given the current high inflation environment, central banks are facing new problems, and may not be able to add additional monetary stimulus to support. While the March 25bp rate hike is almost a given, we are likely to see at least a 5-fold rate hike this year. I suspect that growth projections for 2022 around the world will need to be revised downwards drastically; hence, a major rotation from risky to safe assets.
What's in store for cryptocurrencies in the near future?
As the world continues to witness Ukraine's continued efforts to prevent the Russian advance, crypto continues to settle. Bitcoin is fluctuating between $35k and $45k with strong realised volatility (3-month daily RV: 3.5%), and is outperforming Ethereum. I believe this trend will continue. Investors are not taking any directional bets, and are now waiting for the big events to come.
BTC overall volumes and open interest profiles continue to be low; similarly, funding rates are nearly flat. While at-the-money (ATM) implied volatility is trending higher (3-month ATM IV: 71.9%), all skew profiles show greater interest in put. I still believe that the right play - once again - is to be long volatility and delta-neutral (straddle, long call short-perp, etc.) as uncertainty has not disappeared yet.
In other news
- Coinbase blocks 25,000 crypto wallets linked to Russians suspected of illegal activity.
- Crypto Exchange FTX establishes presence in Europe and the Middle East. The new division is based in Switzerland, with an additional base in Cyprus.
- Dozens of tokens drop when prolific developer Andre Cronje calls it quits.
- Fantom (FTM) loss eases as foundation soothes investor concerns.
Happy Trading!
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