Crypto Market Update

• Today, we are seeing some minor consolidation in the crypto market coinciding with the slight bounce in the rates and DXY N/A% .BTC 2.83% is trading just north of $65k, while ETHBTC continues to struggle, with ETH 1.74% moving lower for the 5th consecutive day and still trading below the $3k mark. Despite the market consolidation, SOLBTC is still green on the day as SOL 4.31% works to regain the $160 level. Top outperformers in the top 100 include CORE, the native token of EVM-compatible BTC L2, and ZBC -0.39% , the native token of the payment streaming application Zebec Network, following its integration with Ondo. Equities are also mixed today, with the ^SPX -0.22%  and QQQ -0.33% , both virtually flat.
• Yesterday’s CPI release brought significant flows back into the market, which is evident through substantial ETF inflows, a large uptick in CME open interest, and a strong move higher in stablecoin creations. Nearly $1.4 billion in BTC Open Interest was added on the CME, while over $300 million flowed into Bitcoin spot ETFs, marking the highest level in over two weeks and pushing the 7-day moving average well into positive territory. Additionally, more than $600 million was added to the total stablecoin market cap since yesterday. These developments suggest investors viewed the CPI as convincing evidence of continued dollar weakness.

Source: DefiLlama, Fundstrat

Source: Farside Investors, Fundstrat

• On Wednesday, a number of institutional investors filed their quarterly 13F reports, revealing significant Bitcoin ETF holdings as of March 31st. Millennium Management disclosed around $2 billion in spot Bitcoin ETF exposure, including $844 million in BlackRock’s iShares Bitcoin Trust, $800 million in Fidelity’s Bitcoin Fund, and $202 million in Grayscale’s Bitcoin Trust. Paul Singer’s Elliott Capital reported a $12 million stake in BlackRock’s ETF, while Apollo Management disclosed a $53.2 million stake in ARK/21’s fund. Other investors, such as Aristeia Capital and Hudson Bay Capital, also participated last quarter. This early institutional involvement increases the likelihood of further adoption among other traditional investors.
• To the surprise of many, particularly those in the White House, the Democrat-led U.S. Senate voted 60 to 38 to overturn the SEC’s SAB 121, which sets accounting standards for firms that custody crypto, requiring them to hold customer crypto holdings as assets on their balance sheet. The measure, previously passed by the House, now goes to President Biden, who has already stated that he will veto it, with both chambers lacking the two-thirds majority needed to override the veto. This represents a significant shift from both House and Senate Democrats, who went against President Biden’s veto promise. This is an encouraging regulatory development for the crypto space.

Technical Strategy

• Bitcoin’s move back over $65.5k was important yesterday towards breaking out of the minor downtrend since mid-April which should allow for a rally back to new all-time highs in the weeks ahead. The fact that early May intra-day peaks near $65.5k was exceeded helped to enhance the short-term technical structure, and likely helps to jumpstart a move back to $72k in the weeks ahead. However, it’s not expected that former all-time highs from March might offer too much resistance, and above $72k should result in BTC 2.83% rallying straight up to near $80k into mid-June before consolidation gets underway. Overall, BTC’s pattern since March has not been negative structurally speaking but has been choppy and overlapping which gives some real technical confidence that a push back to new highs should be underway. While some minor backing and filling could happen in the days ahead, it’s not expected to undercut $60k, and might find support at $63-$64.5k before turning back higher to challenge April highs. Bottom line, i suspect that the correction from March has run its course and it’s right to be bullish for a move back to new all-time high territory.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.39T +$125B(5.51%) BTC Dominance 54.69 % (0.82%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$111B (0.00%) In Exchanges +$18B (0.94%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$2.3M (-0.94%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +0.1575(-0.3627) Binance +0.6837(0.3320) Bitfinex -0.0070(-0.0009) Bitmex +0.1622(-0.8378) ByBit +0.2037(-0.5347) Deribit +0.4555(0.3558) Huobi -0.1337(-0.1337) Kraken +1.3096(0.9820) Mean +0.1575(-0.3627) OKex -0.1949(0.5435) Sentiment BMI : 44 (9.09%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $66,680(6.32%) Spot Basis +$465(0.70%) Volume 860,726(41.31%) Open Interest 272,059(2.85%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 42,321(112.85%) Open Interest 257,206 (5.91%) Vol. Put/Call Ratio 0.5050 (-19.94%) OOI Put/Call Ratio 0.4554 (0.77%) All metrics as of 2024-05-16 17:57:36 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.28T $64,738 -0.41% 53.28% ETH $353B $2,936 -1.62% 29.03% -15.82% SOL $71B $158 2.46% 55.23% 1.27% DOGE $366,174 $0.0004 -30.69% -99.59% -99.73% All prices as of 2024-05-16 13:48:59 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -0.32 $31 -1.53% 35.11% -11.86% ETHE -0.24 $22 -2.03% 11.86% -27.02% News Quick Bits The Block BlackRock spot bitcoin ETF’s over 400 holders is ‘mind boggling’: Bloomberg analyst Eric Balchunas is impressed by the early performance of BlackRock's spot bitcoin ETF. CoinDesk CME Looks to Take on Binance and Coinbase, Could Launch Spot Bitcoin Trading: Report The CME is already the top bitcoin futures exchange by open interest, while the offshore, non-regulated Binance dominates the spot market. Dose of DeFI CoinDesk How 2 Brothers Allegedly Cheated a Noxious-But-Accepted Ethereum Practice for $25M First there was "The Bait." Then there was "Unblinding the block," followed by "The Search," and ultimately "The Propagation." U.S. prosecutors detailed an incredibly complicated Ethereum exploit in an indictment. The Block PancakeSwap offers to pay off interface fees for Uniswap users PancakeSwap will pay up to $8 million to Uniswap eligible traders who have paid high interface fees on its competitor's platform. Regulation CoinDesk U.S. Treasury Says It Wants to Better Money Laundering Regulations Around Crypto, Other Illicit Finance The U.S. Treasury Department wants to continue beefing up anti-money laundering and counter-terrorist financing efforts around digital assets, as part of its broader strategy to tamp down on illicit financing. CoinDesk U.S. Senate Votes to Kill SEC's Crypto Accounting Policy, Testing Biden's Veto Threat The U.S. Senate joined the House of Representatives on Thursday in seeking to erase the controversial Securities and Exchange Commission (SEC) crypto policy known as Staff Accounting Bulletin No. 121, though President Joe Biden has vowed to veto the resolution. Mining CoinDesk Miner Hut 8’s Bitcoin Stack Gives it Capital to Pursue Upcoming Projects, Upgrade to Buy: Craig-Hallum The miner’s bitcoin stash is a protective feature for investors and opportunistic capital for the business to use for growth, the report said. Web 3.0 The Block Notcoin goes live on TON blockchain, airdrops over 80 billion tokens Over 80 billion NOT tokens have been airdropped to participants, amid crypto exchange listings, including Binance, OKX and Bybit.