LAST WEEK'S RECAP:
- FED minutes showed FED officials see upside risk in inflation which may lead to more hikes.
- Wall Street Journal reported SpaceX wrote down their BTC holdings in 2021 and 2022.
- The crypto market experienced large liquidation exceeding $1B, the biggest liquidation since FTX's bankruptcy.
- Bloomberg reported SEC is expected to approve ETH's future ETF by October.
- OpenSea will make the creator royalty fee optional.
- Shiba Inu’s layer 2 network: Shibarium, went live but encountered bridge issues.
LEGACY MARKETS – DXY
DXY is still within the same range, with a noticeable slowdown last week. DXY likely stays range-bound as the market awaits more inflation data. At this point, it is primarily seeking if there’s an actual turning point in the downward inflation trend.
LEGACY MARKETS – VIX
Last week, we mentioned the VIX likely staying elevated going into NVDA earnings, as this has been the market leader since the start of the year. It may, however, prove the pivot point for the current market correction.
BTC WEEKLY VIEW
As mentioned last week, and the week before, we expected a pick up in volatility in August, which resulted in a pretty hefty correction in BTC and ETH. For now, if BTC does not instantly reverse, we will likely see another couple of weeks/months of low volatility sideways chop.
ETH WEEKLY VIEW
Same as with BTC, ETH also saw a large drop, with deribit even dropping into the 1400s. Large liquidation in the current market has outsized moves because of the lower liquidity in the market. For now, it seems very likely that both ETH and BTC are in for more weeks/months of low volatility sideways price action.
ETH/BTC gained some relative strength on the BTC drop. However still small and still only showing relative strength when BTC drops or moves slowly. For a real reversal, we’re looking for outsized movement of ETH relative to BTC without effects on BTC influencing its action.
TOTAL3 – USD MARKET STRENGTH
TOTAL3 is still in range and a lot of altcoins have retraced quite a bit of their drop correlated with BTC. However, if this range breaks down, altcoins are looking at another heavy drop. For a more sustained upside, we’re still looking for the red zone to get broken.
TOTAL3/BTC – BTC MARKET STRENGTH
ALT/BTC is confirming what we saw, post BTC drop. It means that alts gained quite a bit of traction (especially the outperformers). For now, a lot of majors still seem stuck between a lot of price levels and a lack of innovation. Meanwhile, in low-cap land, there’s quite a lot of new stuff that is capturing market share rapidly.
- NVDA earnings are scheduled for the 23rd of August this week. NVDA has led the entire resurgence of equities this year. So a lot of eyes will be on their earnings. Equities have however been correcting for a while with some seeing fairly large drops. This could mean if NVDA has positive results that it is a pivot point for the market in general.
- In the lower marketcap segment, a few things were popping up last week. PRIME (Token of parallel) did a clean 4x after game beta was well received showing some early positive signs for gaming-related tokens.
- Friends.tech is also popping off, making it able to buy shares of your favorite influencer. With Faze Banks of Faze clan joining the platform on Sunday.
- Crypto Options Update:
- Sizeable vol moves last week across tradefi & crypto. Benign Jul-23 CPI data overshadowed by the Crypto ETF decision delay resulted in some chaotic moves most likely exacerbated by typical low liquidity summer months.
- On Deribit we noted a significant temporary perp discount to spot - most likely due to Deribit option portfolio margin mechanics kicking in.
- Prop-wise we are on the sidelines for now - waiting for Jackson Hole announcements later this week.
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.
Edited by: Rizza Carla Ramos
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