The latest moves in crypto markets, in context By Omkar Godbole, CoinDesk reporter Was this newsletter forwarded to you? Sign up here. |
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Welcome to Monday. Here's what's happening in crypto today: |
- Ether options point to price declines after software upgrade this week.
- Crypto derivatives trading platform Bitget unveils a Asia-focused Web3 fund.
- SushiSwap loses $3.3 million in exploit.
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CoinDesk Market Index (CMI): 1,262 +1.5%
Bitcoin (BTC): $28,341 +1.6%
Ether (ETC): $1,860 +1.4%
S&P 500 futures: 4,129.50 +NaN%
FTSE 100: 7,741.60 +1.0%
Treasury Yield 10 Years: 3.29% +0.0 |
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Ether options call-put skew showed both short-term and long-term bearish put options trading at a slight premium to bullish calls. The put bias shows lingering concerns that some "stakers" might rush to liquidate their tokens following Ethereum's Shanghai upgrade on Wednesday, driving prices lower despite analysts suggesting otherwise. Skew measures the cost of calls relative to puts and reflects what people are willing to pay to acquire an asymmetric payout on either the upward or downward direction of the market. The Shanghai upgrade will open withdrawals of more than 18 million ETH staked in the Beacon Chain since December 2020. According to Galaxy Digital, 553,650 ETH might be sold over seven days following the upgrade, amounting to a per-day selling pressure equal to just 1% of Ether's daily trading volume and is likely to have a big negative impact on the cryptocurrency's price. Ether traded up 1.4% at $1,860 early Monday. |
Crypto derivatives trading platform Bitget announced a $100 million Asia-focused Web3 fund on Monday, validating the narrative that the next wave of blockchain development will come from the East. The launch of the new fund is part of the exchange's "go beyond derivative" strategy aimed at driving the adoption of crypto and Web3, Gracy Chen, BitGet's managing director, told CoinDesk. Security issues continue to haunt the crypto market even as token valuations recover from the 2022 crash. Decentralized exchange SushiSwap suffered an exploit on Sunday involving the 'RouterProcessor2' contract used for trade routing on the exchange and led to a loss of more than $3.3 million to a single user, @0xsifu, a popular pseudonymous trader in Crypto Twitter circles. The SUSHI token was volatile in the past 24 hours, clocking a high and low of $1.13 and $1.06, respectively. At press time, the token traded near $1.10, up 2.6% in the past 24 hours. |
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Market Insight: A Case Against Bitcoin Drop |
Bitcoin has surged 70% this year, hitting nine-month highs of over $29,000. While the sharp rally has brought the derivatives market back to life, the overall use of leverage remains muted, suggesting a low risk of "liquidations-induced" wild price swings. When the degree of leverage in the market – measured by the ratio between the dollar value locked in perpetual futures (open interest) and the cryptocurrency's market capitalization – is high, short liquidations tend to exacerbate bullish moves. That, in turn, shakes out more shorts, leading to a short squeeze. Similarly, long liquidations exacerbate bearish moves, leading to a long squeeze. The ratio has continued to drop this year. "The medium-term trend of decreasing open interest/market cap has not been broken, which is reassurance that, even in the event of downward volatility, price is most likely not going to decrease to the level it was at to begin the year," analysts from Blockware Solutions added. |
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Source: CME's FedWatch tool |
- Friday's U.S. jobs report has raised bets that the Federal Reserve will increase rates next month, with markets pricing in a 63.4% chance of a 25 basis-point rate hike, according to the CME FedWatch tool.
- The higher rate hike odds may put a floor under the dollar index and cap gains in risky assets, including cryptocurrencies.
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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