This week, our desk noticed that BTC volatility remained muted, while some old projects launched in the previous cycle experienced unusual trading demands.
Syscoin ($SYS) is the native token that underpins the eponymous protocol and forms a Layer 2 network to enable rollups on Bitcoin, thereby improving the network's scalability. Syscoin was first listed on Binance in September 2020, reaching an all-time high of $1.33 at the beginning of 2022. Recently, the announcement of the launch of the USDS-Margined SYS Perpetual Contract on the Binance Futures market fueled market demand for this token, and the SYS price spiked by more than 100% in the last seven days.
SuperRare ($RARE) is a high-end NFT art marketplace which positions itself in the NFT space as a highly selective art gallery. The platform spends much time reviewing work before it's available for sale, making investors more confident in its quality. The recent bid-up was fueled by a combination of technical indicators and growing investor interest. The RARE price soared over 228% in the last seven days.
Tron ($TRX) saw strong demand on the market last week, driven by the SunPump memecoin deployer on the network. TRX price surged 17.9%, and the blockchain’s daily revenue reached an all-time high of $3.84 million a few days ago, surpassing the daily revenue generated by its rivals, Ethereum and Solana.
Overall Market
The above chart shows the BTC price movement in the 1-day chart.
As we discussed last week, the $60k/$61k level had become a strong resistance level for BTC, and it could face another retest on the downside before market demand builds.
Last Thursday, BTC fell below $56k after the strong retail sales growth data print in the United States. US equities soared on bullish sentiment fuelled by a lower risk of a US recession. However, the risk-on sentiment did not spread from US stocks to cryptocurrency. Instead, BTC and the broader crypto market fell sharply while the S&P 500 index rose 1.6% on the same day. BTC quickly recovered from its low of 56k to $57.5k after the US market close last Thursday and found its way back to the $60k level over the weekend.
Starting last Saturday, the BTC price moved toward the $61k resistance level, forming higher highs and higher lows along the way. It is currently trading at approximately $60,500. In recent days, our desk has observed strong demand among certain altcoins. It indicates that market sentiment is improving, and the bullish sentiment from altcoins contributes to the BTC price recovering and testing the high bound of the strong resistance level around $61,000.
However, our desk is concerned about the current upward movement in the BTC price, as trading volume has been low in recent days. Before we can confirm that the BTC price is ready for the next leg up, we need to see a larger volume on the market to back up our bullish thesis.
Fed Chair Powell will deliver his speech at Jackson Hole on Friday, and any hints in his comments about the pace of rate cuts will shift market appetite for risk assets, particularly digital assets.
Our desk anticipates some volatility this Friday, and it should provide some clarity on the next move in the Bitcoin price following Powell's speech.
Options Market
The above chart is the at-the-money implied volatility for BTC options with various tenors.
The chart shows that IVs remain low in the short to medium term (around 50%) and higher in the long term (around 60%). The BTC price has been moving in a narrow range over the last few days, and the low realised volatility contributed to lower IVs for short-dated options.
As the Jackson Hole conference approaches on Friday, we anticipate increased volatility in front-end options. Any hawkish remarks or hints from Fed Chair Powell could shake the capital markets and cause a spike in volatility.
Investors can also use options to mitigate downside risk while keeping their Bitcoin holdings. If investors are bearish on the BTC price in the near term, they can buy puts to hedge against the downside risks. The current low IVs on near-term options present an excellent opportunity for investors to hedge at low premiums.
Binance users can now use our Options RFQ platform to trade options without worrying about market liquidity on the order book. Users can also reach out to our OTC desk for live quotes for larger sizes that may not be supported on the Option RFQ platform.
You can find out more about options RFQ by visiting: https://www.binance.com/en/vip-portal/trading?ref=OTC-Option
Macro at a glance
Last Thursday (24-08-15)
In July, US retail sales increased by 1.0% month on month, exceeding the forecasted growth rate of 0.4%. During the same period, core retail sales increased by 0.4%, exceeding the expected growth rate of 0.1%. The stronger-than-expected retail sales growth alleviated market concerns about a possible US recession, increasing market confidence and appetite for risky assets. The US equity market saw significant gains, with the S&P 500 index rising 1.61% and the Nasdaq index rising 2.46%. However, the optimism did not spread to the cryptocurrency market, with BTC falling 1.95% and ETH falling 3.44%.
US initial jobless claims fell to 227k from 234k the previous week, indicating the strength of the US labour market.
On Tuesday (24-08-20)
Eurozone inflation rose slightly to 2.6% in July, up from 2.5% in June, matching economists' expectations. The core CPI increased by 2.9% year on year in July, in line with preliminary data released two weeks ago and matching the inflation rate in both May and June. This emphasises the underlying price pressures in the Eurozone, staying well above the central bank's 2% target.
As measured by the Consumer Price Index (CPI), the annual inflation in Canada increased by 2.5% in July, matching market expectations and falling from 2.7% in June. Meanwhile, the Bank of Canada's Core Consumer Price Index rose 1.7% from the previous year, a slight decrease from the 1.9% growth seen in June.
On Wednesday (24-08-21)
The Labor Department reported Wednesday that the U.S. economy created 818,000 fewer jobs than previously reported in the 12-month period ending March 2024. The -0.5% revision to the total payroll level is the largest since 2009, raising market concerns about the rapidly cooling labour market in the United States.
This Friday (24-08-23)
Federal Reserve Chair Powell will speak at the Fed's annual Jackson Hole Economic Policy Symposium. The market is looking for hints from Powell's remarks about how quickly and far the Fed could cut rates.
Convert Portal Volume Change
The above table shows the volume change on our Convert Portal by zone.
Last week, the BTC price struggled to break through the strong resistance at $61k for more upside potential, while some altcoins began to pump along with high trading demand.
Last week, the Megadrop Zone had the highest increase in trading demand on Convert. Trading volumes for Lista DAO ($LISTA) and BounceBit ($BB) have quadrupled over the last seven days, indicating strong market interest in these two projects.
The volume of the NFT pool zone increased by 272.8% during the same period. SuperRare ($RARE) was the primary driver of this strong volume growth.
Additionally, the Fan Token Zone increased by 123.9%. Alien Worlds ($TLM) was the primary contributor to this organic volume increase.
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.
Email: trading@binance.com for more information.
Join our Telegram (https://t.me/BinanceOTC) to stay up to date with the markets!
