As discussed last week, our desk saw strong demand for DeFi tokens, with a price surge on Sushiswap token ($SUSHI), Uniswap token ($UNI), and Aave ($AAVE).
This week, the lagged DeFi token Pancakeswap token ($CAKE) picked up the flow and soared over 74%.
Pancakeswap, a decentralized exchange operating on the BNB Smart Chain and other layer-1 chains, has a total value locked (TVL) of $1,472,165,808 as of November 8.
Recently, Pancakeswap rolled out a new feature called Position Manager, a collaborative integration between the DEX and other protocol partners, allowing users to deploy capital more efficiently and earn a higher yield.
With the announcement of the listing of USDⓈ-M CAKE Perpetual Contract on Binance, Pancakeswap users can now gain more exposure to the bigger community and tap into better liquidity.
Overall Market
The above chart shows the year-to-date BTC price in 2023.
As discussed in last week's post, the blue line, which was previously the trend line support, is now the trend line resistance. In the $35k to $36k range, Bitcoin is currently attempting to breach this blue line and get past this resistance level.
While BTC is having a hard time bypassing the resistance zone above, its momentum remains on the upside. Binance Fear & Greed Index score is at 66 as of November 8, showing market sentiment remains bullish.
BTC market cap dominance declined over 1% from 53.92% to 52.88% in the past 7 days. The decrease in BTC market capitalization percentage suggests that other altcoins are outperforming and gaining capital from BTC.
The above chart shows the year-to-date ETH price in 2023.
Since ETH price topped out at $2,146 in April, Ethereum ($ETH) has formed a bear flag in the past 6 months.
Recently, the ETH price broke the bear flag pattern when the BTC price traded sideways with a strong resistance zone above the $36,000 level. The upper trend line acted as support for the price re-test.
With the risk backdrop of peaking interest hikes from central banks and declining inflation readings around the world, our desk expects to see more capital inflow into crypto assets with the narrative of large-scale crypto adoption in the near future.
As BTC is consolidating around the current price level, our desk noticed investors are allocating capital from Bitcoin to other altcoins for better performance and higher returns. Ethereum, the second-largest cryptocurrency network by market capitalization, could be one of the winners in attracting capital from this capital rotation.
Options Market
The above table shows the at-the-money implied volatility in BTC and ETH options.
The implied volatility of both BTC and ETH options retraced slightly on the front end, with little change on the long end.
Our desk noticed that the implied volatility of BTC options has a greater degree of retracement than that of ETH options. It matches our market observation that BTC is trading sideways and ETH is breaching the upper trend line, as discussed in our Overall Markets.
The above chart is the 25-delta skewness of ETH options.
A positive skewness reading indicates that the options traders have more intention to buy calls than to buy puts.
In the past 10 days, the skewness across all ETH option expiries has been in an upward trend. The bullish sentiment was also reflected in the ETH price, which moved from $1,795 to $1,881 in the same period.
In our desk’s view, we could see better performance on the ETH price over the BTC price in the near term, and the capital will flow back to BTC once it clears the strong resistance zone above its current level.
Macro at a glance
Last Thursday (2023-11-02)
Bank of England maintained its interest rate at 5.25%, as expected. However, the central bank said the UK was facing a stagnating economy and persistent inflation, and Governor Andrew Bailey reiterated that it was too early to talk about rate cuts.
U.S. initial jobless claims were 217k, higher than the estimated 210k and last week’s 212k.
Last Friday (2023-11-03)
Canada reported that the unemployment rate rose to 5.7% from 5.5% in September, higher than the consensus estimate of 5.6%. The rising unemployment rate suggests a loosening of the tight labour market in Canada.
US average hourly wage increased 0.2% month-over-month, less than the estimated 0.3%.
US nonfarm payrolls increased by 150k in October, less than the estimated 180k increase. That was a sharp decline from the gain of 297k in September.
US unemployment rate rose to 3.9% from 3.8% in September, higher than the consensus estimate of 3.8%.
From the data reported, the US faced less job creation and a higher unemployment rate, which eased the pressure on the Fed for another rate hike. With the lagging effect on the US economy after the 10-month aggressive rate hikes, the market believes that the Fed’s rate is at its peak level.
S&P 500 and Nasdaq index soared 5.85% and 6.48%, respectively, this week, while the US dollar ($DXY) declined 1.42% and closed at 105.069.
On Monday (2023-11-06)
The Reserve Bank of Australia raised its cash rate by 25 basis points from 4.10% to 4.35%, as expected, in response to the high inflation. However, the statement from the RBA ended with a soft tone, suggesting the central bank was less willing for further hikes.
In the coming week, we have the following events:
Germany is scheduled to report its CPI reading in October, with an estimation of 3.8%, a sharp decline from 4.5% in September.
UK is scheduled to report its GDP growth in the third quarter with a consensus estimation of 1% on Friday and the unemployment rate next Tuesday.
The US is scheduled to report the CPI reading next Tuesday.
Convert Portal Volume Breakdown
The above table shows the volume breakdown of our Convert Portal.
As the price stabilized on stablecoin pairs last week, the volume of stablecoin swap transactions retraced back to 6.74%.
Our crypto-to-crypto transaction volume increased 4.26% to 16.44% while BTC price moved sideways and altcoins outperformed last week. It suggests that investors are transferring capital from BTC to other outperforming altcoins and actively adjusting their portfolios.
Moreover, over the past seven days, the volume of crypto to stablecoin declined by 2.02% to 36.18%. The volume of stablecoin to crypto surged by 6.24% to 29.41%. Both changes suggest that investors are facing a FOMO into crypto assets after two consecutive weeks of altcoin surges.
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 trading@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 trading@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: trading@binance.com
Join our Telegram (https://t.me/BinanceOTC) to stay up to date with the markets!
