Crypto Rebounds with Broader Risk Assets

In this week's Crypto Insight I discussed...


RISK ASSET REBOUND LIFTS CRYPTO

Some negative headlines this week around regulatory action on crypto currencies both in US and in Russia. The market however, stayed true to it’s correlation with risk assets and staged a decent bounce. I see the 39k to 42k area as key resistance that will likely contain the market in the short term before…


BITCOIN 30K TARGET STILL IN PLAY

ETH has recovered back toward that key break level at 2800, would expect to fail on first test. Still targeting around 1750 on the downside to coincide with BTC 30k. Expect some wild swings in this one!


ON CHAIN METRICS

After seeing negative funding rates and a clear bias towards short in the futures market, the last rally up to above 38k has started to trigger some short liquidations. Front-end basis remains negative on ETH and BTC which leave room for more squeezing higher.


CRYPTO VOL ANALYSIS

Term structures collapsed back down to normal contango as you’d expect with lower realised and the “crash” taking a pause. Put skew also got crushed as most expiries seemed to converge around 5 vols for puts over.


CRYPTO OPTION FLOWS

BTC standout flow was a big buyer of Jun 40k/60k call spreads and general short, dated puts and put spreads for protection as the vol and skew came lower. In ETH, wings seemed to be the flavour of the week, with significant volume in 2000 puts.


Filmed on on Tuesday 1st February 2022.


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