Waiting for Yields to Steady, “Digital Silver” Looks like A Good Trade
Another Rinse
Last week, we talked about the futures market getting ahead of its skis, trading with increased leverage despite a continued lack of follow-through in spot market demand. Well, rates and the dollar have remained stubbornly high on the back of continued hawkish rhetoric from central bankers, and as we will discuss below, global liquidity has pulled back in recent weeks.
Thus, bulls received another blow on Thursday evening when, in the span of an hour, the crypto market experienced a good old-fashioned liquidation cascade.
Total liquidations would amount to nearly $200 million in the span of an hour. The effect on spot market prices was exacerbated by the low liquidity environment that we are in and will likely remain in for the near future.
Below we can see the current market depth – exchange liquidity is anemic. This is important to keep in mind moving forward. Illiquidity is conducive to large candles in both directions.
While open interest remains elevated compared to the total crypto market cap, the good news is that futures traders may be starting to take their feet off the gas, evidenced by falling funding rates on perps.
Market Liquidity Update
Shifting from micro liquidity dynamics to macro-o...Reports you may have missed
INFLOWS RESUME On Monday, market sentiments were rattled by a surprisingly strong manufacturing PMI figure, marking the first expansionary reading in 18 months. This led to a rise in rates, with risk assets across the board experiencing selloffs amid renewed inflation concerns and fears that the Federal Reserve might need to implement further measures to cool the economy. However, in our crypto comments video on Tuesday, we outlined a couple...
Adding RON and IMX As a Different Flavor of ETH-beta and Gaming Exposure (Core Strategy Rebalance)
MARKET SHRUGS AT HOT CPI The latest Consumer Price Index (CPI) data indicated a hotter inflationary environment than forecasted for February. Despite the surprise in the numbers, market participants appeared largely unmoved, suggesting that the potential impact had already been factored into their calculations prior to the release. This resilience reflects a broader sentiment that a rates-driven selloff, in response to the CPI figures, is not a significant near-term risk....
RESEND: Bitcoin ETF Equilibrium Price Dynamics: ETF likely to drive significant rise in daily demand
BY POPULAR DEMAND, WE ARE RE-SENDING THIS BITCOIN PRICE IMPACT OF SPOT ETF REPORT FROM JULY 24, 2023 The Bitcoin spot ETF was finally approved. And we are seeing the surge in price of Bitcoin because of attractive supply and demand dynamics.We received multiple requests to resend this report from July 24, 2023 which looked at supply and demand dynamics if a spot ETF was approved.In short, we believe a...
FLOWS BEGET MORE FLOWS We have recently discussed the potential return of crypto being correlated with equities due to the new category of market participants entering the fold. However, price action this week suggests that inflows into the BTC ETFs may be throwing water onto that theory. It seems apparent that, at least in the near-term, that the ETF flows narrative is gaining steam, and it is likely that the...
Articles Read 1/1
🎁 Unlock 1 extra article by joining our Community!
You’ve reached your limit of 1 free monthly articles. Please enter your email to unlock 1 more articles.
Already have an account? Sign In d9dbcb-dc3627-517056-135164-846529
Already have an account? Sign In d9dbcb-dc3627-517056-135164-846529