ETH Beta Receives a Boost, SOL Recovers from Bug

Feb 7, 2024

Market Update

  • Equity indices continue to march higher, with the QQQ registering a near 1% gain on the day and the SPX following closely behind, up approximately 75 bps. It's a broad rally with all sectors in the green for the day, but technology is outperforming, up over 1%. Rates started the day lower, but the longer end of the curve is now marching higher, likely due to a major 10-year auction today. Meanwhile, the DXY is generally flat on the day, as is gold. Cryptoassets appear in tune with tech stocks, as BTC inches higher toward $43.5K and ETH rallies back above $2,400. ETH beta names are performing particularly well, with LDO, SNX, OP, and ARB -0.15%  all outperforming the broader market. This is likely on the back of ARK filing an amended S-1 for its spot ETH ETF, reflecting similar structural changes that we saw amidst the BTC filing process, as well as the successful implementation of the Dencun upgrade on the final testnet this morning.
  • The Ethereum network has progressed with the deployment of the Dencun upgrade on the Holesky test network, marking the final test phase before its anticipated mainnet launch in March, featuring proto-danksharding via EIP-4844. Activated on Holesky early today and quickly achieving finality, this development follows its implementation on the Goerli and Sepolia testnets in January. The upcoming Ethereum All Core Developers call is expected to finalize the mainnet deployment date, which is projected for early to mid-March. The Dencun upgrade aims to enhance both the execution and consensus layers. It introduces "blobs" for off-chain data storage, aiming to significantly reduce storage demands and transaction costs for dApps, especially benefiting Layer 2 rollup chains through more efficient, scalable data management. This represents significant progress on a key milestone we've been monitoring for this year.
  • The Solana network experienced an outage yesterday, leading to nearly five hours of downtime before a patch was developed and deployed. A comprehensive postmortem is still pending, but initial theories indicate that the outage was due to a bug related to recent changes in a Solana Improvement Proposal, which interrupted block progression. Although the adverse effects of a blockchain outage are significant, it is crucial to differentiate between this incident, attributed to untested software, and prior outages triggered by an overload of transactions causing validator issues. SOL seems undeterred by the outage, having climbed from $94 yesterday, now above $97.
  • Bitcoin spot ETF flows have maintained their positive momentum, marking eight consecutive trading days of positive flows. This trend coincides with a deceleration in GBTC outflows. However, it's important to note that the net inflows have shown a decreasing trend in recent days. The total USD net inflows across all spot BTC ETF products now exceed $1.5 billion.

Source: Farside Investors, Fundstrat

Daily Technical Strategy

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Mark L. Newton, CMT

Head of Technical Strategy

CFX 9% rally to multi-day highs on Wednesday is encouraging as a necessary jump-start in momentum which should help prices rapidly push back to new monthly highs in the weeks to come. After a mild consolidation in recent weeks, CFX successfully managed to hold an area of prominent uptrend line support which had held most pullbacks since last Fall 2023. Volume spiked initially on its rise back on 1/19/24, and has begun to steadily build following the most recent rise.. The ability to recoup more than half of the recent selloff on above-average volume in one day's time is typically an encouraging sign that can help prices follow-through in the days to come. Key areas of resistance lie near $0.2514 near last week's highs which was important last week as this lined up with a prominent 38.2% Fibonacci retracement area. Daily closes above this would help drive price up to $0.296, then $0.34 which also have importance as levels which might cause a slowdown in the weeks ahead. However, the larger area lies at $0.488 which approximates the peak from last March which could be an important area to watch in the months ahead as gains progress. Overall, CFX looks likely to follow-through higher as a result of Tuesday's gains and is a more attractive risk/reward given recent consolidation.

Daily Important Metrics

Crypto Size

Bullish signal is tied to the crypto market growing

Market cap $1.65T +$17B (+1.04%)
BTC Dominance
51.05% (-0.18%)
Stablecoins

Increase in circulating stablecoins is a Bullish signal

In Circulation $96B(-0.06%)
In Exchanges $16B(+0.03%)
BTC Metrics

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

# BTC in Exchanges 2.4M(0.04%)
Funding Rates

Positive funding rates indicate traders are Bullish

Aggregate0.71 (-0.17)
Binance1.00 (-0.00)
Bitfinex1.54 (-0.76)
Bitmex0.82 (-0.18)
ByBit0.64 (-0.36)
Deribit0.44 (0.07)
Huobi1.00 (0.00)
Kraken0.51 (-0.15)
Mean0.71 (-0.17)
OKex0.56 (0.16)
Sentiment
ETH Beta Receives a Boost, SOL Recovers from Bug

BMI : 49 (0.00%)

Futures

A positive spread between Futures Prices and Spot Prices is Bullish

CME BTC Price$43,250 (0.77%)
Spot Basis
$212 (0.49%)
Volume425,040 (-23%)
Open Interest
263,646 (0.69%)
Options all exchanges

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

Volume11,297 (-47%)
Open Interest239,035 (1.03%)
Volume Put/Call Ratio0.5541 (-26%)
Open Interest Put/Call Ratio0.4482 (0.51%)

All metrics as of February 7, 2024 12:26 PM

All Funding rates are in bps

Crypto Prices

Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD
btc imageBTC
$853B $43,465 0.65% 2.91%
btc imageETH
$290B $2,416 2.56% 6.17% 3.26%
btc imageSOL
$43B $97.47 1.95% -4.18% -7.10%
btc imageADA
$17B $0.4903 -1.59% -17% -20%
btc imageDOGE
$11B $0.0796 1.04% -11% -13%
btc imageLINK
$11B $18.58 -0.32% 24% 21%
btc imageDOT
$8.8B $6.89 2.28% -15% -18%
btc imageMATIC
$7.9B $0.8268 3.53% -14% -17%
btc imageNEAR
$2.9B $2.81 2.47% -22% -25%

Exchange Traded Products (ETPs)

Symbol Premium to Nav Last Price Daily Change Year to Date Relative to BTC YTD
GBTC -0.07% $37.25 4.78% 1.09% -1.83%
BITW -37% $24.10 3.88% -1.87% -4.79%
ETHE -13% $19.73 4.50% 1.39% -1.53%
BTCC -0.06% $8.07 3.46% -1.34% -4.26%

News

QUICK BITS

CoinDesk

Ethereum's Dencun Upgrade Reaches Final ‘Holesky’ Testnet, Starting Countdown to Data 'Blobs'

The test simulated “proto-danksharding,” a technical feature aimed at reducing the cost of transactions for rollups as well as making data availability cheaper.

The Block

Anchorage Digital partners with wealth manager FusionIQ to offer institutional clients digital asset access

Anchorage Digital will provide FusionIQ's institutional and financial advisor clients regulated digital asset access. 

Decrypt.co

Pyth’s Airdrop Put $140 Million Into Crypto Users' Wallets—Now Round 2 Is Here

The second phase of the DeFi oracle network’s Solana token airdrop will benefit the makers of dapps that utilize Pyth data.

MARKET DATA

Decrypt.co

Dymension Gains 58% in First Day, But Questions Loom About Big Brain Staking

DYM saw massive gains in its first day after $390 million worth of tokens were airdropped yesterday. But now questions swirl about a validator.

CoinDesk

CME Trading Volume Reached Highest in 3 Years After Bitcoin ETF Approval

The total derivatives trading volume on CME rose 35% in January to $94.9 billion, the highest since October 2021.

REGULATION

The Block

Digital asset firm Prometheum sets sights on offering ether custodial services

The move comes after Prometheum received FINRA approval to offer crypto custodial, clearing and settlement services in December 2023.

MINING

The Block

Bitcoin miner Hut 8 appoints Asher Genoot as new CEO

Bitcoin miner Hut 8 has appointed President and board member Asher Genoot as CEO, following the completion of its merger with US Bitcoin Corp.

WEB 3.0

The Block

Ondo Finance’s US Treasury-backed stablecoin expands to Sui

Months after introducing a cross-chain solution, Ondo Finance is expanding to Sui, the Layer 1 blockchain developed by Mysten Labs.

CoinDesk

Social App Friendzone to Start Operations on Polygon Network This Month

Friendzone was built by early team members from Band Protocol, Synthetix and Koinly and targets the social application space.

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MARKET COMMENTARYU.S. EQUITIES ARE RELATIVELY FLAT AS THEY CONSOLIDATE ABOVE PRIOR ALL-TIME HIGHS. THE SPX IS TRADING AT 5,300, AND THE NDQ IS HOVERING NEAR $18,600, WHILE THE DXY 0.00% (-0.07%) IS SHOWING A SLIGHT DECLINE, TRADING AT $104.4. Crypto assets are showing strength, with BTC -0.40% rising 2.84% to $67.1k and ETH -1.76% surging 4.86% to $3,090. Liquid staking tokens are building on Ether's outperformance, as LDO -1.71% and PENDLE -5.12% have gained 10.11% and 13.43%, respectively. Similarly, layer-2...

CRYPTO MARKET UPDATETODAY, WE ARE SEEING SOME MINOR CONSOLIDATION IN THE CRYPTO MARKET COINCIDING WITH THE SLIGHT BOUNCE IN THE RATES AND DXY 0.00% . BTC -0.40% is trading just north of $65k, while ETHBTC continues to struggle, with ETH -1.76% 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 -2.54% works to regain the $160 level....

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