Weekly Crypto Market Update - July 31, 2023

LAST WEEK’S RECAP:

• FED raised a well-anticipated 25 bps in July.
• U.S. PCE increased 3% YoY in July, the lowest rate since March 2021.
• Meta reported better-than-expected EPS ($2.98 vs. $2.91) and revenue (3.03 billion vs. 3 billion) in Q2.
• Worldcoin was listed on Binance/OKX/Kucoin and other exchanges.
• Binance seeks dismissal of CFTC lawsuit
• Japanese Prime Minister Fumio Kishida reaffirmed the country’s commitment to fostering the Web3 industry during the WebX conference.
• Sequoia Capital cut the size of its crypto fund from $585M to $200M.
• LTC halving is expected to happen on August 2nd.
  

LEGACY MARKETS – DXY

DXY is again high in the new range. If we reject here, then it’s likely that risk assets will continue to go higher. If it flips at the 101 back into support, the market likely see a longer pullback/consolidation, especially in equities.

LEGACY MARKETS – VIX

VIX has seen small pops during earning season, although nothing has been sustained. This week, we saw a couple of heavy-hitter earnings in tech. Because of that, VIX will likely hold 13-14 levels as a floor for this week.

BTC WEEKLY VIEW

BTC is still stuck under/at the 2021 support. With just single trend days now and then, it continued nonstop at small ranges. If big tech earnings end up being small-nothing-burgers & ETF approvals start signaling favorable outcomes, there’s a good chance that BTC will start picking up more steam again.

ETH WEEKLY VIEW

ETH is also still in the same spot as last week, with L2 activity taking off on BASE over the weekend. Lining up ETH/USD and ETH/BTC, it seems that we can expect a rather large move in the next 1-2 months. This should give a decent lasting trend than what we’ve seen so far.

ETH/BTC

ETH/BTC is finding some strength again. However, the strength is only maintained because BTC isn't moving much at the moment, which is not favorable for real strength. We’d rather see ETH/BTC being stronger when BTC is strong as well. Timing-wise, it seems ETH/BTC will have a much better direction, latest by the end of October.

TOTAL3 – USD MARKET STRENGTH

TOTAL3 is also still ranging while building some strength under resistance. The main alt strength has been in new on-chain coins that are easily movable, like the 1-10M market cap range with low liquidity pools. High caps have been stabilizing, but not showing large outperformance yet. Low volatility periods are usually good to position in before large movements happen from a spot POV.

TOTAL3/BTC – BTC MARKET STRENGTH

ALT/BTC ratio is also still at an inflection point. A better scenario would be TOTAL3 pushing through the red zone, which would likely correlate with the BTC ratio also flipping into this green zone. For now, the entire market seems to be in a wait-and-see scenario, while some alts see 20-30% pops now and then.

SUMMARY

• BASE (Coinbase L2) altcoins rallied over the weekend.
• More big tech earnings this week (AAPL, AMZN)
• LTC was one of the first coins to show relative strength as the frontrunner of the halving event. It’s important to note for any kind of “sell the news” event during the halving day, and/or if it drags more alts with it.
• Crypto-related stocks seem a lot stronger than the actual coins/tokens, this might show a slight interest in the market, however, a lot of people are still skeptical of the space after past events.
• Crypto options update
  • ETH 30-day 25 delta R/R (P-C) range bound over Jul-23 around the neutral level (-5/+2).
  • ETH 30-day ATM vol continued suppression keeping us on the sidelines for DOV-related trades.
  • The expectation is that the market will pick up later in the year in BTC volumes, causing a downstream impact on ETH from a BlackRock Spot ETF decision.
    
    

DISCLAIMER:

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.

This post is prepared by Kairon Labs Traders: Joshua van de Kerckhove, Charles Belford, and Patrick Li

Edited by: Rizza Carla Ramos