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 43,548 USD (-1.14% in 7 days), Ethereum (ETH) is trading at 3,023 USD (-2.92% in 7 days), and the spread is trading at 0.06941 (-1.78% in 7 days). The main crypto indices are reflecting the consolidation phase after the momentum broke last Thursday and US CPI hit 7.5% YoY (40-year high) and 0.6% MoM. Altcoin index: -4.03% in 7 days, Midcoin index: - 7.67% in 7 days, and Shitcoin index: -8.77% in 7 days.
What I am looking the most at in terms of traditional finance (TradFi) is the volatility index (VIX) - the so-called “fear index” - which is currently trading at 28.35 (23.98% in 7 days), and probably reflects the future tail risk events. Spot cryptocurrency prices and the crypto derivatives market are waiting for a nudge.
Macro picture
In macro terms, the Fed's underreaction to inflation will probably drive risky assets to higher prices and vice versa. As for geopolitical tensions: bitcoin, and cryptocurrencies in general, have followed their own path in the past, and have indeed performed well when there were geopolitical tensions. Therefore, we might also expect an increase in demand. However, the change in landscape has made bitcoin fragile due to the volatility of the US stock market, and it is now behaving as a risky growth-oriented stock. BTC realised volatility is dropping WoW; 3-month daily volatility annualised is 63.04% and correspond to the 25th percentile for medium measurement windows.
The Implied Volatility moved a little higher (66.86%), and the term structure remains almost identical WoW. As the plot suggests, since the beginning of 2022, BTC has not really moved. The key resistance levels are still between 45k-47k, and the key support levels are at 42k-38k.
Other developments
- The popularity of crypto-related apps skyrockets after the Super Bowl
- BlockFi to pay largest SEC fine ever for a crypto case: $100M
- Crypto Funds saw the fourth week of inflows as Ether Funds turned around
Happy Trading!
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