In this week's Crypto Insight I discussed...
The crypto space remains heavier than most risk assets right now. Every time we get some hope of a rally, it get faded quickly. BTC dominance continues to rise, now back to Oct2021 highs as ALTs find no love as money continues to flow out of De-fi.
ETH continue to hug the 1700 support zone, which looks ominous and may need a downside break. ETH/BTC has continued lower towards next main support at 0.055. We have the Ropsten testnet merge tomorrow and another developer call on Friday, which may provide clues on the likelihood of any delays in the Merge of main net which is due in August. Price action so far doesn’t show investors as optimistic.
SOLANA WEAK ON MORE OUTAGES
Still no love for alts last week, with SOL worst hit down 17% after yet another 4-hour outage on 1st June, which makes it 12 times in 2022.
After reaching all-time highs in Nov 2021 at $260, SOL is now down around 80%.
Whilst its low transaction fees made it popular with the NFT community, these multiple outages need to be addressed if it is to truly compete with ETH as a long-term L1 solution.
Key BTC on-chain takeaways from Glassnode this week:
1) The Mayer Multiple (ratio between price and 200-day moving average), a widely used model for mapping value zones, shows
bear markets historically have two phases. And that we are currently in the midst of a second phase when Mayer Multiple gets down between 0.8 - 0.6.
2) The Realized Price Model (average cost basis of all coins in BTC supply, based on when they last moved on-chain) is another macro indicator. Tends to signal a bottom when spot prices trade below Realized Price, currently at ≈ $23k,600.
3) The Cumulative Realized Loss…
CRYPTO VOL ANALYSIS
For most of last week, both implieds and realized had been drifting lower, with ETH trading cheaper (lower IV/RV spread) and offering better value gamma. We saw a spike in short term implied after the weekend with up and down 5% moves waking up the market. Still prefer owning ETH gamma to BTC given potential catalyst (Ropsten testnet merge)
CRYPTO OPTION FLOWS
Mixed flows, in a choppy market. Each time the market tries to break higher +5%, we see FOMO short dated call buyers 32k-36k strikes in June.
As markets fade lower, protection buyers come in, saw Dec 15k puts, July 30k puts and July 26k/38k risk reversals.
Filmed on on Tuesday 7th June 2022.
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