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!
At the time of writing, Bitcoin (BTC) is trading at $40,688 (+1.53% in 7 days), Ether (ETH) is trading at $3,038 (+0.37% in 7 days), and the spread between Ether and Bitcoin (ETH/BTC) is trading at 0.07469 (-1.16% in 7 days).
Many Fed presidents will speak this week and all have already shown a preference for a 50 basis point hike. I believe the market has already priced this event, so I expect digital asset prices to continue moving in tight windows as a result of a non-event.
Bitcoin analysis
The BTC 1d Heikenn Ashi candles chart called a reversal on April 18th as the Open-Close spread is very small with Close and High relatively high. Major technical indicators, both oscillators and moving averages, are in favor of a sell. Realized Volatility (RV) is - once again - in the lower 25th percentile for all measurement windows and I see no reason for an impending peak. The question is, how deep should Treasuries go down until this relationship stops holding, thus causing a rebound? Looking at the Volume Profile Visible Range (VPVR):
- Supports: $38k - $40k
- Resistance: $47k - $50k
Dynamics in the derivatives markets
Meanwhile the Open Interest (OI) is stable week over week (WoW) as we are again trading at January 2022 levels. BTC Futures Annualized Rolling 3mth Bases is trading 1.45% on the CME, as the Easter break and US dollar shortage have not materialized and leverage continues to be out of the question. Likewise, funding rates are quite negative across all the venues.
The term structure continued to steepen WoW, with the front-end trading at 50% implied volatility (IV) while the backend hasn't really moved. The 25d Skew is trading higher as the risk reversal is in favor of the Puts, with the 6-months trading at 5%: in my opinion it is too high, as I still cannot argue the reason for a different long-term skew from 0. The OI profile again suggests that $ 40k (support) will be a magnet as Call and Put are equally distributed.
Happy Trading!
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