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 $48,473 (+3.3% in 24 hours), and Ethereum (ETH) is trading at $4,045 (+3.06% in 24 hours).
China has cut rates from 3.85% to 3.8%, confirming the first reduction in two years. Interest rate cuts tend to inject liquidity into the economy. Therefore, hedges against inflation such as cryptocurrencies, gold, and asset prices generally react positively to rate cuts. However, China's monetary stimulus is probably too small relative to the moves of the Fed and other central banks, and for these reasons, I don't expect large movements in cryptocurrency prices as a result of these monetary policies.
Derivatives Dynamics
BTC skews are trading at par for different maturities with a spread of 2% between 1-week and 6-months to maturity, while at-the-money volatility (ATM IV) continues to hold up well. Short-term price actions will probably remain quiet over the holidays, and in anticipation of this, traders were quick to close the December 31 contracts. The potential for a sharp drop in prices remains real, but I still believe this consolidation phase will last for some time to come. ETH skews are also trading around par with a 1% spread between 1-week and 6-months to maturity. ATM IV has decreased by approximately 10% after FOMC, with a parallel shift on all maturities.
Also interesting: Ethereum's transaction fees, which also depend on volumes, are finally decreasing. Average transaction fees typically anticipate the price changes of ETH and Layer 2 tokens. L2 tokens have risen significantly in recent months, and although I'm not expecting fireworks towards the end of the year, early 2022 could be the time for the second-largest cryptocurrency by market cap to see a price rebound. Here is the first analysis that I have prepared for today's TA Tuesday:
The chart compares the value of a portfolio consisting of long L2 tokens and short ETH (blue line, left axis), and the average transaction fees of ether in native units (grey mountains, right axis). If Ethereum blockchain fees continue to decline, ETH is likely to quickly outperform L2 tokens.
Happy Trading!
All intellectual property, proprietary and other rights and interests in this publication and the subject matter hereof are owned by Crypto Broker AG including, without limitation, all registered design, copyright, trademark and service mark rights.
Disclaimer
This publication provided by Crypto Broker AG, a corporate entity registered under Swiss law, is published for information purposes only. This publication shall not constitute any investment advice respectively does not constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. This publication is not intended for solicitation purposes but only for use as general information. All descriptions, examples and calculations contained in this publication are for illustrative purposes only. While reasonable care has been taken in the preparation of this publication to provide details that are accurate and not misleading at the time of publication, Crypto Broker AG (a) does not make any representations or warranties regarding the information contained herein, whether express or implied, including without limitation any implied warranty of merchantability or fitness for a particular purpose or any warranty with respect to the accuracy, correctness, quality, completeness or timeliness of such information, and (b) shall not be responsible or liable for any third party’s use of any information contained herein under any circumstances, including, without limitation, in connection with actual trading or otherwise or for any errors or omissions contained in this publication.
Risk disclosure
Investments in virtual currencies are high-risk investments with the risk of total loss of the investment and you should not invest in virtual currencies unless you understand and can bear the risks involved with such investments. No information provided in this publication shall constitute investment advice. Crypto Broker AG excludes its liability for any losses arising from the use of, or reliance on, information provided in this publication.
