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 $36,769 (-17.52% in 7 days), Ethereum (ETH) is trading at $2,526 (-20.68% in 7 days), and the spread is trading at 0.06877 (-3.79% in 7 days).
Russian aggression against Ukraine
Most major cryptocurrencies fell on Monday as a Russian invasion of Ukraine loomed closer. Russian President Vladimir Putin said he would recognise two pro-Russia breakaway republics in Eastern Ukraine, and made a case for invading Ukraine, saying that the country's pro-Western government was a threat to Russia. The main crypto indices are reflecting the bearish sentiment. Altcoin index: -20.37% in 7 days, Midcoin index: –19.56% in 7 days, and Shitcoin index: -25.28% in 7 days.
On the bitcoin derivatives side: funding rates are nearly flat, and the futures open interest (OI) along with the options OI has been declining WoW since the start of 2022, reflecting that investors are not taking any direction. As for volatility: skews react quickly to every single event, and the 6-month 25D skew is trading at 4%, and is nearing an all-time high!
The front-end of the term structure is starting to see a take-off (+20 vols). The term structure overall is almost unchanged WoW, and implied volatility remains quite low compared to the previous five months. Since the introduction of DeFi Options Vaults (DOVs) and the popularity of covered call strategies, volatility has started to become very compressed, and although I believe that this is the right play over the next 90 days, I am not expecting volatility to reach January 2021 levels (3 months at- the-money IV traded at 100%+).
Technical picture
In terms of the TA side of bitcoin: we are now trading below every moving average window from 10 days up to 200 days, while most of the oscillators, including RSI, CCI, etc., are neutral. Support levels are at $35k, and resistance levels are at $38k and $41k.
Happy Trading!
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