• On Tuesday, The US Securities and Exchange Commission (SEC) was instructed to review its decision to reject Grayscale's bid for a Bitcoin ETF by an appeals court, potentially opening the way for approval.

  • BTC spot price surged over 5% and traded above $27,000 after the news, lifting up the whole crypto space. BTC spot price temporarily traded above $28,000 and traded at $27,716, up 6.11% before the Asia markets opened. 

  • However, before the Asian markets opened, Ethereum (ETH), the largest altcoin by market cap, only increased by 4.60% and was trading at $1,728. After the Ethereum network switched from Proof of Work (PoW) to Proof of Stake (PoS), ETH's historical trading behaviour against Bitcoin changed from being a high beta cryptocurrency to a lower beta cryptocurrency.

  • Bitcoin Cash (BCH), for example, another high beta cryptocurrency compared to Bitcoin, was up more than 18% as a result of the BTC surge on Tuesday.

Overall Market

  • As mentioned last week, we considered the $24,500 to $25,000 range as the high-demand zone and expected such a range to be the strong support level.

  • We also analysed some catalysts that could potentially bring back bullish sentiment and send the BTC price to a new yearly high in 2023.

  • On Tuesday, BTC surged back above the $27k level with several bullish news items:

    • The crypto asset manager Grayscale Investments won the SEC lawsuit for Bitcoin ETF review. On June 29, 2022, the SEC denied Grayscale’s application to convert GBTC into a spot ETF, and Grayscale filed an appeal right after. Now the SEC has 45 days to appeal the decision.

    • X, formally known as Twitter, has obtained the license required for crypto payments and trading in the US. As Elon Musk actively reshapes the social media platform to include payment features, it might suggest that X will acquire a large amount of cryptocurrency for its payment feature. Similar to Elon Musk’s automaker company, Tesla, X will most likely buy and hold Bitcoin on its balance sheet. 

    • Also, the first deadline for the BlackRock Bitcoin spot ETF application is this Saturday, September 2. As the SEC got defeated in the Grayscale case, will the SEC approve Grayscale’s Bitcoin spot ETF along with BlackRock’s and Fidelity’s?

  • However, as shared last week, we can’t be sure if the Bitcoin bullish momentum is back until the BTC price reclaims the $32k level. If the BTC momentum is back, we expect to see a strong resistance level at $48k, which also fits in the Fibonacci levels.

Options Market  

  • Our OTC desk noticed that the implied volatility was increasing on the front end following the Tuesday spike.

  • The front-end implied volatility for BTC options has increased to 39.2%, as shown in the table above, while the mid-term IV is still below 40%.

  • Additionally, our desk observed that IVs in ETH options are currently trading at a significant discount to IVs in BTC options.

  • ETH used to be a high-beta asset in comparison to BTC, as we mentioned at the beginning of this article, meaning ETH options used to have a higher IV surface than BTC options did.

  • However, after the PoS upgrade was completed on the Ethereum network, this trading pattern changed. In comparison to BTC, ETH is now trading as a low-beta asset. 

  • Since last year, the NFT's space activities have drastically decreased. Since ETH gas fees have been at a low level for more than a year as a result, the less volatility of ETH price may also be influenced by this.

Macro at a glance 

  • Last Wednesday (2023-08-23)

    • The S&P Global US Services PMI for August edged lower to 51.0, below the estimated 52.3, and is the third consecutive month of decline since June. The downward trend may indicate that the US economy is cooling off and encountering difficulties.

  • Last Friday (2023-08-25)

    • In his speech in Jackson Hole, Fed Chairman Powell echoed what he said last year that the inflation rate was still higher than what policymakers considered to be acceptable. He stated that the Fed will maintain its flexibility on future actions while acknowledging the progress that has been made. He made no mention of when the Fed might be prepared to start easing, though. 

    • The S&P 500 closed up 0.69%, and the Nasdaq closed up almost 1%, as Powell did not crash the market as he did last year. BTC, however, had a mild response and closed at $26,050, down 0.5%. 

  • On Monday (2023-08-28)

    • To help the ailing market and boost investor confidence, China cut the current 0.1% stamp duty on stock trading in half on Monday. The A50 index in China opened with a gap up over 5% but lost most of the gain during the day and only gained 1.47% at the close.

    • This reduction in stamp duties suggests that China, one of the world's largest economies, is actively looking for ways to stimulate its economy and strengthen investor confidence.

  • On Tuesday (2023-08-29)

    • The number of US job openings in July as reported by the US Job Openings and Labor Turnover Survey (JOLTS) stood at 8.827M, less than the anticipated 9.465M and June's 9.165M. The number suggests a decreasing demand/supply imbalance in the US labour market, favouring the Fed and reducing the likelihood of another rate hike at the September meeting. As a result, the S&P 500 closed up 1.45% and the Nasdaq closed up 2.15% 
       

Convert Portal Volume Breakdown

  • The above table shows the volume breakdown of our Convert Portal. 

  • This week, the trading weight is similar to what we saw last week.

  • We saw fewer fiat-to-crypto transactions across the desk, and the weight slightly dropped by 0.91%.

  • Due to the bullish news on the Grayscale lawsuit win, we saw a significantly higher transaction volume from stablecoins to crypto, and the weight was up 1.18%.

  • However, the crypto-to-crypto transaction weight was 0.52% lower compared to the number last week. It suggests that investors are comfortable with their crypto portfolio and have less willingness to reallocate their crypto assets.

Why trade OTC?  

Binance offers our clients various ways to access OTC trading, including chat communication channels and the Binance Spot RFQ platform (https://www.binance.com/en/OTC-Trading) for manual price quotations, or automated price quotations via our Binance Convert and the Binance Convert OTC API. For manual price quotations, you may visit our Spot RFQ Platform, where you can RFQ (request-for-quote) and trade directly with our OTC trading team via a live chat, or reach out to us via our email at liquidity@binance.com for our trading desk to get in touch with you and get started. 

Alternatively, OTC trades may also be automatically quoted on Binance Convert and via API, offering users a quick and simple way to execute trades across 60,000+ pairs with one simple click. Binance Convert supports over 350 tokens listed on the exchange including fiat pairs. Begin trading from as little as 1 USD. To start, simply navigate to the Binance Convert (https://www.binance.com/en/convert), select the coins you wish to trade, preview and confirm the quote with settlement reflecting almost instantly in your wallet balance. For details and access to  Binance Convert OTC API, please refer to our Convert Endpoints (https://binance-docs.github.io/apidocs/spot/en/#convert-endpoints) and reach out to us at liquidity@binance.com if you have any questions or require assistance.

Visit Binance OTC and Execution Solutions (https://www.binance.com/en/otc) to get more information on our OTC products and solutions. 

Experience the main benefits of Binance Convert and OTC Trading: 

  • Fast & Competitive Pricing 

  • Instant settlement 

  • Widest availability of coins 

  • Bespoke service with unique market insights 

  • Zero fees and slippage 

Email: Liquidity@binance.com 

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