Following an immediate selloff of BRC20 tokens on the exchange, 1000SATS and ORDI recovered in the last seven days, posting 23.2% and 15.2% gains, respectively.
The volatile market conditions prompted traders and investors to use Binance Convert to reduce the price risk of their positions' setup and existence. Convert provides users with 24/7 access to an automated quoting platform. Once the user accepts the quote, the trade is complete. The price displayed on the screen is the final price; there are no additional trading fees. Furthermore, once the price is locked, the user does not have to be concerned about market price fluctuations if the market is moving against them. It is one of the most effective ways to reduce price risk for large trades.
In addition, trading on Convert reduces the amount of trading information available to the open market because the trade is executed directly with the Binance OTC desk. It mitigates market impact and information leakage on the orderbook.
Overall Market
The above chart shows the BTC from November 2023 to the present.
As we mentioned in our previous post, following the $1 billion GBTC liquidation by FTX's bankruptcy estate, the BTC price finally got a chance to breathe and recovered above the green support zone around $38,000.
The rebound successfully pushed BTC's price back above the lower blue trend line support.
The Federal Reserve announced on Wednesday afternoon that the interest rate would remain unchanged at 5.50%, and Fed Chairman Powell's speech shattered the market's hopes for a March rate cut. All risk asset prices fell following the speech. US equities closed lower, with the S&P500 index down 1.6% and the tech-heavy Nasdaq index down more than 2.2%.
The cryptocurrency market is experiencing the same selloff force as the rate cut will be delivered by the Fed later than markets were anticipating. BTC fell by over $1,800 from $43,730 before the Fed rate decision announcement to $41,900 after the Asian markets opened.
If the BTC price is supported around $41,500, near the lower blue trend line, and bounces back, we can confirm that the correction from $49,000 right after the Bitcoin spot ETF approval date has ended. And we should see the $50,000 milestone before the halving event later this year.
The above chart shows the ETH price since November 2023.
As we discussed in our previous post, Ethereum experienced a significant selloff following the on-chain movements initiated by Celsius Network. The large-scale movement of ETH to centralized exchanges caught the market's attention that the next round of liquidation could be not too far down the road.
The market consolidated and recovered alongside the BTC price. However, following the breach, the lower blue support trend line has flipped to resistance.
Yesterday, ETH surged above $2,380 in a short period of time after a Standard Chartered Bank analyst issued a bullish forecast. The analyst believes the SEC will approve ETH spot ETFs on May 23, with a price target of $4,000 for ETH prior to approval.
However, the sentiment faded quickly. Today, ETH prices fell alongside other risk assets after Fed Chairman Powell downplayed the likelihood of a March rate cut.
Our desk remains cautious about the ETH price. If ETH gains support above the red line ($2,130) and breaks above the resistant blue trend line, we can expect bullish momentum to push ETH to $2,700 and higher. However, if we lose the $2,130 support line, ETH will be able to test the $1,850 support level.
Options Market
The above table shows the 25-delta skewness on BTC and ETH options.
Following the recent consolidation of BTC and ETH prices, implied volatility returned to the range seen before the spot ETF approval. This indicates that the market expects less volatility in BTC and ETH prices. Currently, the IVs for BTC and ETH options in the short to medium-term range are between 45% and 50%.
The 25-delta skewness table above indicates that options traders are neutral on the market, with a slight upward bias for long-dated options.
The return-to-normal implied volatility and low skewness indicate that options traders expect price consolidation over the next 30 to 60 days.
Macro at a glance
Last Wednesday (2024-01-24)
The Bank of Canada kept its interest rate at 5.00% unchanged for the fourth time in a row. Tiff Macklem, governor of the Bank of Canada, signaled that the monetary policy path has shifted from raising interest rates to maintaining them. He pointed out that while inflation has been falling, it remains above the comfortable level for a rate cut.
Last Thursday (2024-01-25)
The European Central Bank kept its interest rate unchanged at 4.50%. ECB President Christine Lagarde stated in the press that talk of rate cuts is premature, and that more data is needed to show a sustainable inflation rate at the target level before the rate cut.
The US Q4 GDP growth rate is expected to be 3.3% on a yearly basis, significantly higher than economists' estimates of 2.0%. The strong GDP growth data indicates that the US economy is robust.
US initial jobless claims rose from last week’s 189k to 214k this week.
Last Friday (2024-01-26)
The US PCE price index increased by 2.6% in December, as expected and the same as the previous month. Core PCE price index growth is 2.9%, slightly lower than the expected 3.0% and a decrease from November's 3.2%. It suggests the possibility that the stubborn core inflation rate in the United States would begin to fall.
On Tuesday ( 2024-01-30)
Germany's Q4 GDP growth is expected to be -0.2% on a yearly basis, which is better than the previous quarter's 0.4% decline.
Consumer confidence in the United States increased significantly in January to 114.8, up from 108.0 in December. The strong consumer confidence is bolstered by low inflation and robust economic growth.
The number of job openings in the United States was 9.026 million in December, indicating a larger labor market gap than the estimated 8.750 million. The data show that the labor market gap between supply and demand was 8.925 million in November, with economists expecting a smaller gap of 8.750 million in December. Instead, the data suggests a larger labor-market gap of 9.026 million. The widening gap implies a larger imbalance in the US labour market.
On Wednesday (2024-01-31)
US ADP nonfarm employment change fell to 107k in January from 158k in December.
The US Federal Reserve held its January FOMC meeting and announced no change to its benchmark interest rate decision of 5.50%. The Fed Chairman Powell turned down the possibility of a March rate cut, stating that more data demonstrating a sustained inflation slowdown to the 2% target rate is required before considering a rate cut. The market is now pricing the Fed's first rate cut for June rather than March.
Following the Fed rate decision announcement, the Dow Jones Industrial Index fell 0.82%, the S&P500 index fell 1.61%, and the Nasdaq index fell 2.23% at close. BTC price fell 3.7%, trading below $42,000. ETH price fell 5.2%, trading below $2,253.
Convert Portal Volume Change
The above table shows the volume change on our Convert Portal by zone.
Last week, trading volume in the Infrastructure zone increased the most overall. The trading volumes of the recently listed AltLayer ($ALT) increased the most out of the 47 tokens in this zone.
The two tokens with the highest volume increase in the Launchpad zone were Tokocrypto ($TKO) and Open Campus ($EDU). The increased trading demand for Tokocrypto and Open Campus was driven by last week's price volatility.
In the AI zone, the increased volume is mainly driven by the Worldcoin ($WLD). Vitalik, a co-creator of Ethereum, posted an article about crypto + AI, and the name of Worldcoin was specifically mentioned on January 30. After the article was posted on social media, Worldcoin soared 17% in 30 minutes but gave up all the gains after 24 hours. The volatile market drove traders to utilize our Convert to minimize price risks.
Why trade OTC?
Binance offers our clients various ways to access OTC trading, including chat communication channels and the Binance OTC platform (https://www.binance.com/en/otc) for manual price quotations, Algo Orders, or automated price quotations via Binance Convert and Block Trade platform (https://www.binance.com/en/convert) and the Binance Convert OTC API.
To access manual price quotations, you may visit our Binance OTC platform (https://www.binance.com/en/OTC-Trading/spot), where you can RFQ (request-for-quote) and trade directly with our OTC trading team via a live chat.
To utilise our Algo orders features, you may visit our BinanceAlgo Orders platform (https://www.binance.com/en/OTC-Trading/AlgoTrading).
For any other inquiries on OTC trading, please reach out to us via our email at trading@binance.com for our trading desk to get in touch with you and get started.
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 & Block Trade platform (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 (https://www.binance.com/en/otc) for more information on our OTC products and solutions.
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