Crypto Market Update

BTC is slightly lower on the day but rallied to over $59.5k overnight. It is currently trading just below $58k after a drawdown following the US market open. On-chain data shows that over 10k BTC was sent from the German government to exchange and market maker partners this morning, more than was sent yesterday. ETHBTC is showing strength today, with ETH up nearly 2% and trading around $3100. SOL is flat as it continues its attempt to break out of the $140 range. Among the top performers in the top 50 assets by market cap are STX and OP, both of which have drawn down considerably in the past couple of months and are responding to the recent bullish impulse. Equity markets are moving higher on the day, with most sectors green. The DXY is slightly lower as rates are down across the curve ahead of today’s 10-year Treasury auction. There is a dearth of material macro data today outside of Fed Chair Powell’s testimony to Congress, where he may or may not provide color on the FOMC’s thinking around rate cuts. The big day for risk markets is tomorrow when the latest CPI report is released, which will undoubtedly play a large role in determining the next big move for crypto.

Positive Stablecoin and ETF Flows

We are seeing more encouraging flows data today. As noted in last night’s crypto comments video, ETF investors have remained resilient despite recent concerns over supply overhangs, with inflows surging. Yesterday marked the second consecutive day of aggregate inflows exceeding $200 million, with $121 million directed into IBIT. Additionally, there has been an uptick in stablecoin creations over the past few days, with the aggregate stablecoin market cap increasing by approximately $1.1 billion, or 0.70%, over the past 7 days, driven largely by a significant increase in USDC supply. This positive data indicates that capital is buying at these levels despite the supply overhang concerns that have permeated the space.

CORZ Enters Massive Chip Deal With Block

Recently, developments from CORZ have focused on their HPC services business, but today they made it clear that they are determined to remain the largest publicly traded miner by hash rate. SQ and CORZ announced an agreement for Core Scientific to acquire Block’s new 3-nanometer mining ASICs, developed by Block’s Proto team, which will provide approximately 15 EH/s of hashrate. This agreement, one of the industry’s largest in terms of hashrate, includes an option for additional volume. This additional capacity will bring Core Scientific’s total hash rate to an industry-leading 35 EH/s. Proto’s stated initiative is to increase the decentralization, transparency, and resiliency of the Bitcoin network by building their chips, systems, and software solutions in an open and transparent manner and in partnership with the mining community. CORZ is up nearly 5% on the day.

Technical Strategy

Following three straight days of gains, many are wondering if Bitcoin might have bottomed out and has begun a new technical uptrend. Unfortunately, while a short-term low does appear close, technically speaking, a bottoming out likely requires a final pullback into next week before any kind of low is in place.   Daily charts show the ongoing downtrend from early June which has resulted in BTC losing more than 20% over the past month.  However, until $60k can be exceeded on this bounce, its sharp downtrend remains in place.  Second, counter-trend DeMark signals of downside exhaustion remain premature, requiring a move back to new monthly lows before officially complete.  Finally, BTC’s daily cycle composite seems to show a cyclical low materializing around 7/15-16th which could translate into a tradable low happening next week.  Downside targets look to intersect near $51.5k, which likely could allow for stabilization and a bounce attempt into early August.  However, we’ll need to see meaningful strength to argue that this selloff has run its course.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.15T +$30B (1.42%) BTC Dominance 53.72 % (0.40%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$112B (0.05%) In Exchanges +$20B (-0.32%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$3.0M (0.09%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +0.6746 (-0.0629) Binance +0.5594 (-0.4396) Bitfinex +0.8870 (0.5163) Bitmex +0.6759 (-0.3142) ByBit +0.9687 (0.0592) Deribit +0.9176 (0.8096) Huobi +0.5009 (0.5009) Kraken +0.6521 (0.0673) Mean +0.6746 (-0.0629) OKex -0.0268 (0.2988) Sentiment BMI : 28 (100.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $58,805 (2.06%) Spot Basis +$179 (0.31%) Volume 597,756 (-44.57%) Open Interest 285,691 (2.19%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 17,092 (-51.98%) Open Interest 227,024 (0.62%) Vol. Put/Call Ratio 0.8843 (36.56%) OOI Put/Call Ratio 0.5090 (0.83%) All metrics as of 2024-07-10 12:00:23 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.14T $57,886 1.05% 37.06% ETH $375B $3,117 2.01% 36.98% -0.06% SOL $66B $142 1.25% 39.15% 1.52% DOGE $395,746 $0.0004 -9.11% -99.56% -99.68% All prices as of 2024-07-10 11:49:41 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -32.38% $34 0.64% 47.85% 7.88% ETHE -0.91% $29 1.78% 50.39% 9.72% News Quick Bits CoinDesk Tezos Foundation Teams Up With Baanx for Non-Custodial Crypto Card Baanx has been working with Mastercard to deliver a range of non-custodial crypto card offerings. The Block Starknet token staking proposed to hit mainnet by Q4 2024 Pending community approval, Starknet staking may go live on testnet soon before a planned mainnet launch in Q4 2024. The Block Vitalik Buterin pushes for Ethereum to respond to 51% attacks in a more automated way Ethereum co-founder Vitalik Buterin argues the network should be more prepared to pivot in the case that the network gets controlled by a bad actor. CoinDesk TON Blockchain Ecosystem to Get New Layer-2 Network Based on Polygon Tech The new protocol, called the TON Applications Chain (TAC), will make use of Polygon’s Chain Development Kit (CDK), as well as their AggLayer. Market Data The Block US spot bitcoin ETFs record $216 million in net inflows, continuing positive flow streak BlackRock’s IBIT led the pack of inflows with $121 million, followed by Fidelity’s FBTC, which recorded $90.95 million in net inflows. The Block Bitcoin’s correlation with US equities falls to multi-month low Bitcoin's correlation with the Nasdaq Composite and the S&P 500 has fallen to a multi-month low, according to data from The Block. Product Updates and Partnerships The Block How =nil; Foundation aims to horizontally scale Ethereum with zkSharding =nil; Foundation CPO Avi Zurlo explains the difference between horizontal and vertical scaling solutions for blockchains. The Block Crypto payment startup Kulipa partners with Mastercard and Argent on debit card Mastercard's latest crypto debit card will use Starknet’s zk-technology to reduce fees.