By Omkar Godbole (All times ET unless otherwise noted)
Crypto Market Sentiment Remains Unsettled After Bitcoin Rapid reversal from Tuesday’s peak at $114,000, and most altcoins imitated the pop and drop. The CoinDesk 20 Index was little changed over 24 hours, although gold’s rally stalled, raising hopes of a rotation into digital assets.
The two-way price action liquidated crypto futures bets worth $600 million. According to CryptoQuant, this represents a three-sigma liquidation event: the liquidation volume was three standard deviations from the mean, making it an extreme outlier and an indicator of increased volatility.
Meanwhile, the ratio of open interest (OI) in Bitcoin options to OI futures has reached its highest level since late 2023. This is generally a sign that amplified price swings are ahead. Additionally, Bitcoin’s 30-day implied volatility indices, BVIV and DVOL, remain elevated (see Technical Analysis section), maintaining gains seen after the October 10 crash and highlighting continued uncertainty.
“Such fluctuations do not help improve the mood of crypto investors,” said Alex Kuptsikevich, chief market analyst at FxPro, in an email.
Continued nervousness, reflected by the Crypto Fear & Greed Index falling to 25, could be a good entry point. “At current levels, the rule of ‘buy when everyone is afraid’ might work, or there might be a shift to more intense sales after three months of stagnation,” he said.
Separately, newly elected Japanese Prime Minister Sanae Takaichi is reportedly preparing an economic recovery plan surpassing last year’s $92 billion to help households fight inflation. The move is seen as an addition to BTC’s upward trajectory by observers including Arthur Hayes, CIO of the Maelstrom Fund.
In industry news, the WSJ said crypto trading firm FalconX was acquiring ETF manager 21Shares and the combined company would develop funds focused on derivatives and structured products. A Bloomberg report noted that some of Asia’s largest exchanges have become hostile to digital asset treasury companies.
As for traditional markets, the dollar index maintained its weekly gains and gold fell for a second day, nearly testing the $4,000 an ounce mark. Stay vigilant!
What to watch
For a more comprehensive list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
- Cryptocurrency
- October 22, 11 a.m.: Circle is hosting a virtual Zoom seminar titled “Inside the Circle Payments Network (CPN)” to explain how financial institutions can leverage CPN for fast, compliant stable settlements.
- October 22: David Sacks, White House AI and Crypto Czar, meets with members of the Republican Senate Banking Committee to discuss the advancement of crypto market structure legislation.
- October 22: Two industry roundtables on crypto regulation in the US Senate, one hosted by Democratic Senator Kirsten Gillibrand and the other moderated by Republican Senator Tim Scott.
- October 22: Zilliqa (ZIL) will activate its mainnet upgrade, Zilliqa 2.0, with a hard fork at block 11,998,800.
- Macro
- October 22, 8:00 a.m.: Mexico, economic activity in August. East. YoY. -1%, MoM Est. 0.1%.
- Earnings (Estimates based on FactSet data)
- October 22: Tesla (TSLA), post-market.
Token Events
For a more comprehensive list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
- Votes and calls on governance
- Unlocks
- October 22: Scroll (SCR) to unlock 43.42% of its circulating supply worth $13.56 million.
- October 22: MultiBank Group (MBG) will release 11.97% of its outstanding supply worth $16.31 million.
- Token Launches
- October 22: Turtle (TURTLE) will be listed on Binance.
- October 22: be listed on Coinbase.
Conferences
For a more comprehensive list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
Symbolic discussion
By Olivier Knight
- continued its ascent on Wednesday, leading the otherwise weak altcoin market with a 9.2% gain over 24 hours.
- The privacy token is now up 461% over the past month and continues to reach record highs.
- The catalyst for ZEC’s rise is the renewed confidence around the growth of protected tokens, which currently represent 27.5% of the total supply.
- Shielding is a privacy mechanism that hides transactions. Shielded tokens must be held in a non-custodial wallet, i.e. not on an exchange.
- With so much supply held in private wallets, the principle is that salable supply is restricted.
- Pair a reduction in supply with increasing demand and this is the result: a relentless upward rally that has outperformed almost every crypto token in circulation.
- ZEC’s gain was a rare sign of optimism in recent weeks, as several other tokens fell to multi-month lows.
- ASTER, which was often dubbed the daily deal in September, fell below $1.00 on Tuesday, compounding a 33% decline over the past week.
- Recently released plasma tokens also found themselves on the sell side of order books as demand and hype quickly faded, leading to a 25% decline over the past seven days.
Positioning of derivative products
- Open Futures (OI) contracts surged 22% to $303 million in the last 24 hours, leading to the growth of a few major coins such as ENA, BCH, HYPE, ADA, AVAX, and BTC.
- Futures contracts linked to LINK, XPL and PUMP experienced capital outflows, reflecting increased risk aversion among investors amid volatile market fluctuations.
- Annualized perpetual funding rates for most major cryptocurrencies, including BTC and ETH, remain near zero, indicating a balanced derivatives market.
- The BTC order book heatmap showed a group of sell orders of around $111,000 in the BTC/USDT perp listed on Binance.
- On the CME, OI in ether futures hit a record high of 2.43 million ETH, with OI in options stable near the lifetime high of 297,000 ETH. BTC, however, continued to lag in terms of forward OI, which held steady at around 142,000, significantly lower than the peak of over 200,000 late last year. The divergence indicates institutional investors’ preference for ETH over BTC.
- On Deribit, flows featured short strangle and call crush strategies in BTC, with some put demand as protection against deeper slides. In the case of ETH, the focus has been on put spreads and short-term calendar spreads, according to Wintermute.
- In the case of BTC, puts trade at a premium to calls across all durations. However, TH options demonstrated an uptrend beyond the December expiration.
Market movements
- BTC is down 2.59% from 4 p.m. ET Tuesday at $108,002.87 (24 hours: -0.51%)
- ETH is down 3% at $3,838.34 (24 hours: -0.98%)
- CoinDesk 20 is down 3.3% at 3,549.42 (24 hours: -0.78%)
- Ether CESR composite staking rate down 1bp to 2.83%
- BTC funding rate is 0.0036% (3.9946% annualized) on Binance
- The DXY is unchanged at 99.01
- Gold futures are down 0.7% at $4,080.50
- Silver futures unchanged at $47.69
- The Nikkei 225 closed unchanged at 49,307.79
- Hang Seng closed 0.94% lower at 25,781.77
- The FTSE is up 0.75% at 9,497.77
- The Euro Stoxx 50 is down 0.35% at 5,667.02
- DJIA closed Tuesday up 0.47% at 46,924.74
- The S&P 500 closed unchanged at 6,735.35
- The Nasdaq Composite closed down 0.16% at 22,953.67
- The S&P/TSX Composite Index closed down 1.73% at 29,888.82
- The S&P 40 Latin America closed down 1.24% at 2,880.55
- The 10-year US Treasury rate is unchanged at 3.955%
- E-mini S&P 500 futures unchanged at 6,775.50
- E-mini Nasdaq-100 futures are down 0.15% at 25,257.50
- E-mini Dow Jones Industrial Average unchanged at 47,133.00
Bitcoin Statistics
- BTC dominance: 59.75% (unchanged)
- Ether-bitcoin ratio: 0.03568 (-0.21%)
- Hashrate (seven-day moving average): 1,107 EH/s
- Hash price (spot): $46.57
- Total fees: 2.95 BTC / $324,895
- Open interest on CME futures: 142,385 BTC
- BTC valued in gold: 25.7 ounces.
- BTC vs. gold market capitalization: 7.26%
Technical analysis
- BTC’s 30-day implied volatility indices, DVOL and BVIV, have risen above their respective 200-day simple moving averages for the first time since April.
- These breakouts indicate expectations of increased price turbulence over the next four weeks.
Crypto Stocks
- Coinbase Global (COIN): Closed Tuesday at $338.62 (-1.5%), -2.02% at $331.78 in pre-market
- Circle Internet (CRCL): closed at $129.85 (-0.73%), -1.34% at $128.11
- Galaxy Digital (GLXY): closed at $42.86 (+8.1%), -5.27% at $40.60
- Bullish (BLSH): closed at $57.27 (-2.54%), -2.97% at $55.57
- MARA Holdings (MARA): closed at $20.07 (-3.18%), -2.64% at $19.54
- Riot Platforms (RIOT): close at $20.67 (-6.09%), -2.9% to $20.07
- Core Scientific (CORZ): closed at $19.23 (+2.23%), -2.18% at $18.81
- CleanSpark (CLSK): closed at $18.77 (-7.99%), -3.89% at $18.04
- CoinShares Valkyrie Bitcoin Miners ETF (WGMI): Closed at $56.01 (-6.29%), -4.77% at $53.34
- Exodus Movement (EXOD): closed at $24.68 (-5.55%)
Crypto Cash Companies
- Strategy (MSTR): closed at $301.91 (+1.79%), -2.29% at $295.00
- Semler Scientific (SMLR): closed at $23.51 (-0.59%)
- SharpLink Gaming (SBET): closed at $14.34 (-3.04%), -2.51% at $13.98
- Upexi (UPXI): closed at $5.09 (-11.01%), -3.54% at $4.91
- Lite Strategy (LITS): closed at $1.95 (-1.52%)
ETF Feed
Spot BTC ETF
- Daily net flows: $477.2 million
- Cumulative net flows: $61.94 billion
- Total BTC holdings ~1.35 million
ETH Spot ETF
- Daily net flows: $141.7 million
- Cumulative net flows: $14.61 billion
- Total ETH holdings ~6.74 million
Source: Farside Investors
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