Markets Await Fed Decision, ARB Airdrop

Mar 20, 2023

Market Update

  • It is another wildly consequential week in global markets as the worldwide banking system continues to fend off liquidity concerns, and traders brace for a decision from the Fed on interest rates following their meeting on Wednesday. Bitcoin is coming off one of its best weeks in history, closing the week up 35% and moving north of $28k for the first time since last June. This afternoon, BTC (+0.4%) is trading relatively flat compared to 24 hours ago, while ETH (-1.8%) and other large-cap cryptoassets are seeing some slight pullback. The large-cap outperformer is SOL (+5.4%), while MATIC (-5.4%) trades in the opposite direction. Bitcoin layer 2 STX (+3.8%) continues to perform remarkably well, likely benefitting from the outperformance in BTC as well as the official launch of Stacks 2.1 yesterday. Meanwhile, major equity indices SPX (+0.2%) and QQQ (-.7%) are turning lower on the day as traditional markets are still witnessing incredible rate volatility. The MOVE (+7.2%) index is back above 180 as the US 2Y is back to 3.9%, approximately 30 bps higher than where it started in the early morning hours. 

  • In Friday's Weekly note, we discussed some measures the Fed is undertaking to inject liquidity into the domestic banking system and how it effectively ends any tightening effects of QT. Over the weekend, the Fed and European central banks engaged in further actions to quell ongoing concerns. UBS agreed (or was compelled, depending on who you ask) to acquire Credit Suisse to prevent contagion risks to the global banking system. Swiss regulators facilitated the deal as Credit Suisse faced the threat of collapse. Concerns were raised due to Credit Suisse's large size and extensive international footprint, with its balance sheet approximately twice the size of Lehman Brothers at the time of its collapse. The deal is seen as an emergency rescue for Credit Suisse, as its book value is only around 4% of the purchase price, which could spark renewed concerns about the health of banks. More importantly, major central banks, including the Fed, BoC, BoE, BoJ, ECB, and SNB, announced a coordinated move to enhance liquidity via standing US dollar liquidity swap lines. They agreed to increase the frequency of 7-day maturity operations from weekly to daily, starting today and lasting through at least the end of April. This action aims to ease strains in global funding markets and mitigate the effects on credit supply to households and businesses. The coordinated effort supports financial stability, maintains investor confidence, and reduces the risk of further market stress.
  • Believe it or not, there are possible non-macro catalysts to look out for this week. Derivative markets for the upcoming Arbitrum (ARB) tokens have opened before the airdrop event on March 23rd as the platform transitions into a DAO. ARB holders can vote on critical decisions affecting Arbitrum One and Arbitrum Nova networks, facilitating faster and more affordable Ethereum transactions. Traders are already engaging in IOU markets for ARB tokens on Hotbit, with $2 million in trading volume within the past 24 hours. BitMEX has also launched an ARB token futures product offering up to 20 times leverage. As the market awaits the ARB token airdrop, a significant wealth-creation event is expected within the Arbitrum ecosystem when trading begins. Using Optimism (OP) as a pricing benchmark, the ARB token should see strong demand in the $1.00-$1.20 price range, leading to a total float valuation of $1.2-$1.4 billion. However, it is crucial to bear in mind that factors such as market dynamics and investor sentiment may influence the actual trading price once the token is available for trading.

Daily Technical Strategy

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Mark L. Newton, CMT

Head of Technical Strategy

Chainlink's 4% gains are ignoring much of the weakness being seen in the cryptocurrency space Monday,and are set to help LINK close at the highest levels in roughly three weeks. Daily LINK charts show the intermediate-term consolidation which has contained the highs and lows over the last year. While prices have gained 25% in the last couple weeks, LINK remains near the mid-point of this lengthy sideways pattern. The uptick in momentum, however, suggests that price should continue to trend higher in the short run, and gains back to $8.25, then $9 are likely into April before any meaningful stalling out. Daily gauges of momentum like MACD and RSI are positive and not overbought. Thus, trends are short-term bullish and pullbacks in the days ahead likely present buying opportunities at $6.50-$6.75 for further upside.

Daily Important Metrics

Crypto Size

Bullish signal is tied to the crypto market growing

Market cap $1.18T +$16B (+1.35%)
BTC Dominance
46.28% (+2.01%)
Stablecoins

Increase in circulating stablecoins is a Bullish signal

In Circulation $76B(-0.15%)
In Exchanges $14B(+0.09%)
BTC Metrics

A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage

# BTC in Exchanges 2.3M(0.41%)
Funding Rates

Positive funding rates indicate traders are Bullish

Aggregate0.96 (0.19)
Binance0.96 (-0.04)
Bitfinex0.00 (0.02)
Bitmex1.00 (0.12)
ByBit1.00 (0.00)
Deribit2.19 (1.85)
Huobi-0.20 (0.14)
Kraken0.52 (0.22)
Mean0.96 (0.19)
OKex0.23 (-0.28)
Sentiment
Markets Await Fed Decision, ARB Airdrop

BMI : 68 (0.00%)

Futures

A positive spread between Futures Prices and Spot Prices is Bullish

CME BTC Price$28,365 (5.06%)
Spot Basis
$179 (0.63%)
Volume1.6M (4.47%)
Open Interest
317,320 (2.68%)
Options all exchanges

Higher open interest change in a bull market is bullish for the sector

Volume24,613 (36%)
Open Interest390,831 (1.53%)
Volume Put/Call Ratio0.5294 (-10%)
Open Interest Put/Call Ratio0.4996 (0.53%)

All metrics as of March 20, 2023 11:20 AM

All Funding rates are on bps

Crypto Prices

Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD
btc imageBTC
$533B $27,566 -1.77% 66%
btc imageETH
$215B $1,753 -3.92% 46% -20%
btc imageADA
$12B $0.3363 -4.37% 36% -30%
btc imageMATIC
$9.8B $1.12 -7.71% 47% -19%
btc imageDOGE
$9.6B $0.0727 -4.95% 3.63% -63%
btc imageSOL
$8.8B $22.95 2.40% 132% 65%
btc imageDOT
$7.3B $6.25 -5.32% 44% -23%
btc imageLINK
$3.8B $7.28 0.24% 31% -35%
btc imageNEAR
$1.7B $2.02 -7.64% 59% -7.76%

Exchange Traded Products (ETPs)

Symbol Premium to Nav Last Price Daily Change Year to Date Relative to BTC YTD
GBTC -38% $15.86 2.79% 91% 25%
BITW -60% $10.15 3.15% 89% 23%
ETHE -52% $8.00 -3.35% 68% 1.73%
BTCC 0.65% $5.10 3.24% 68% 1.92%

News

QUICK BITS

Bitcoin.com

Several Major Central Banks Take Coordinated Action to Boost Liquidity Amidst Banking Crisis

On Sunday evening, March 19, 2023, at 5:00 p.m. Eastern Time, the U.S. Federal Reserve, along with several central banks including the Bank of England, Bank of ...

CoinDesk

Arbitrum IOU, Futures Markets Heat Up Ahead of ARB Token Airdrop

An IOU token and an upcoming futures product are letting traders speculate on ARB prices ahead of this week’s claim event.

MARKET DATA

The Block

Bitcoin outflows jump tracked by Coinshares despite rally

Outflows over the past five weeks reached $406 million, representing 1.2% of total assets under management. The post Bitcoin outflow...

CoinDesk

Open Interest in Bitcoin Futures Hits Yearly High of $12B

An uptick in open interest alongside a price rally is said to confirm an uptrend.

REGULATION

CoinDesk

Belgian Crypto Ads Must Warn of Risks Under New Rules

The Financial Services and Markets Authority will have to be notified of major ad campaigns, as a survey reveals crypto investors are often trying to get rich q...

CoinDesk

Senator Cynthia 'Crypto Queen' Lummis: Lack of Laws Pushing Industry Overseas

The senator from Wyoming – a speaker at CoinDesk's Consensus festival - on crypto's prospects in Washington D.C.

FUNDRAISING AND M&A

CoinDesk

Market Maker DWF Labs Invests $20M in DeFi Liquidity Protocol Synthetix

DWF Labs purchased $15 million worth of Synthetix's native token SNX on March 16 with a further purchase of $5 million to follow.

The Block

Turkey’s Metatime raises $11 million in seed funding amid rising crypto adoption

Metatime, a Turkish crypto exchange that is yet to launch, raised $11.15 million in seed funding. The post Turkey’s Metatime raises ...

HACKS, EXPLOITS, AND SCAMS

The Block

FTX sues for control of Bahamas assets, calls FTX Digital Markets ‘a front’ to defraud customers

Lawyers for FTX slammed the exchange's Bahamian entity, which oversaw FTX.com, as an 'offshore haven for a continuous fraudulent scheme.' ...

Decrypt.co

New Emails Show FTX Met With FDIC Months Before Its Collapse: Report

Leaked emails show FTX.US’ policy head Mark Wetjen “begging the federal government to regulate us.”

Reports you may have missed

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Following the worst week of ETF flows since inception, BTC (+3.89%) is rebounding, rising to $69.6k, and ETH (+4.09%) has reclaimed the $3,500 mark. Last week’s outflows totaled $888 million, representing about a fifth of the inflows seen in the previous two weeks. ONDO, an institutional RWA protocol, is one of the top performers today, rising 7.61% as investors remain optimistic about the future of tokenized assets and their ability...

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