Last Week Summary
- A slow week with the Dow Jones correcting after a massive rally. Stalling the entire market in anticipation of CPI & FOMC, and also the monthly + quarterly option expiry in equities this week.
- Ethereum developers target Mar 2023 for Shanghai hard fork, after which, users can then withdraw staked ETH.
- Tether started issuing offshore Chinese Yuan (CNHT).
- Circle could get access to Fed’s RRP (Reverse Repo Operations) via the BlackRock partnership.
- GBPT discount to NAV is close to -48% and ETHE discount to NAV is above -50%.
Legacy Markets VIX
Last week, the market saw a small bounce in the VIX from just under the 21 level. This caused the market to start raging - in anticipation of this week's large events. If numbers turn out to be positive, the VIX will likely drop back to sub-21, giving the market further relief. With the DJI (Dow Jones) being leaders in the current environment, this should finally drag Nasdaq and crypto for another leg up.
Legacy Markets DXY
DXY is still weaker. The direction of DXY this week and for the foreseeable future will likely be governed by the numbers we see this week on CPI and FOMC, as well as the speech that Powell will give. If he speaks dovish with good numbers backing it up, the whole spectrum of risk assets will see an upside relief.
Open interest and Funding Rates
To change it up this week, we’re checking the ETH OI (Open Interest) profile instead of BTC. With ETH OI flipping BTC, it seems that ETH is now positioning itself as the new leading indicator instead of BTC. Currently, there’s not a lot of information on higher timeframes. The pattern we’re noticing indicates a slight OI increase on a lower timeframe, which will eventually revert back to the mean - chopping up high-leverage traders.
BTC Weekly View
BTC (Bitcoin) is still trading below the June lows, which doesn't seem ideal. Ideally, if numbers are good this week, BTC could reclaim the lows over 17.6k, and set up for a year-end rally. However, if numbers are bad this week, this will likely grind up lower - to an all-time low for the year.
ETH Weekly View
ETH (Ethereum) is still sitting on support but is also trading way above the June lows. If the numbers are good this week, ETH will likely see a larger up move into the end of the year, and will likely sustain it until the new year. However, If the numbers are bad this week, it will probably have the same result as BTC (see above).
ETH/BTC is still in the range. We’re still looking for a small break upwards, above the red zone - before triggering a wider altcoin wave.
TOTAL2 - USD Market Strength
TOTAL2 is between BTC and ETH, structurally grinding right at the lows. This also shows in the majority of the trading week, as traders become warier on the slightest sign of weakness between BTC or ETH. If the trend continues downward, Total2 will probably drop by 30% from where it is now. On the upside, we can target the red zone as the first major zone of resistance.
TOTAL 2/BTC - BTC Market Strength
TOTAL2/BTC is also showing some weakness again on the highs. The entire crypto market is basically just waiting for CPI/FOMC and how equities will react to it, as there is currently no relative strength in crypto.
The information in this report is for information purposes only and is not to be construed as investment or financial advice. All information contained herein is not a solicitation or recommendation to buy or sell any digital assets or other financial products.
Kairon Labs provides upscale market-making services for digital asset issuers and token projects, leveraging cutting-edge algorithmic trading software that is integrated into over 100+ exchanges with 24/7 global market coverage. Get a free first consult with us now at kaironlabs.com/contact