The market was off to a rocky start this week as BTC traded back below $27k after seeing a short term bounce off our support zone highlighted in previous weeks.
BTC saw a sudden pump yesterday and is currently up 1.9% with the altcoin market neatly following suit.
LDO was amongst one of the top performers this week, currently up over 27%. The sudden surge can be attributed to the anticipated launch of Lido V2, upgrading several features to their DAO ecosystem.
CFX picked back up this week after a period of downwards momentum, currently up 19.7%. CFX recently partnered with China telecom, launching the first blockchain based sim card.
Convert Portal Volume Breakdown
Crypto to stablecoin transactions remain significant this week, with a value of 33.07%. Despite the sudden bounce the market saw this week, speculators still remain sceptical sidelining cash for a later date.
Stablecoin to crypto placed 2nd with a value of 22.69%, the bulls took control this week driving the price back above $27k with a sudden mid week bounce.
Crypto to crypto transactions remained significant with a value of 13.03% as speculators rotate holdings into the altcoin market, trying to capture further movement to the upside.
Options
Our OTC desk observed a change in the ETH options market, large ETH block trades got our attention. One trader shorted almost 60,000 ETH call calendar spread by buying 2200 Calls expiring Jun 30 and selling 2200 Calls expiring Sep 29, the notional is over $1.2 billion on each leg.
The US debt ceiling is expected to be hit in June, and there is still no sign showing a deal will be made. This trader seems to bet on a possible price move significantly from the current level. The max payoff on this shorted call calendar spread is that the ETH price moves away from the current level, up or down, and the trader can close both legs with nearly 0 costs. Given this interesting timing and the options structure, it seems the trader is expecting something abnormal to happen in June, and the US debt ceiling could be the catalyst.
Overall market technicals
BTC
BTC started off rocky this week as price dipped below $27k, looking as if a further breakdown was on the cards.
A midweek bounce occurred as price swept the Sunday low and bounced over 2.5%, as bulls stepped back in.
Currently, looking at the chart our support zone around $26,500 has held despite price initially wicking through. Factors point towards the upside, if the new potential trendline does hold.
Alternatively, we’ve seen previously that the trendlines highlighted have held initially but ultimately failed as price broke through. It then stems the question, will the same pattern play out?
Macro at a glance
Last Thursday (05/11/23), the US reports their initial jobless claim as 264k, higher than the estimated 245k and the previous month’s 242k. This might imply that the labour market starts to loosen.
Last Friday (05/12/23), US Michigan Consumer Expectations and Sentiments for May are both reported at 53.4 and 57.7, respectively. Both numbers are below the estimation, raising the concern of a recession. Also, the US debt ceiling talk did not reach a deal, which means the US might default on its bond as early as June 1, 2023.
Tuesday (05/16/23), Canada released its CPI reading for the month of April, 0.5% MoM and 4.1% YoY, lower than the estimated 0.7% MoM and 4.4% YoY. Bank of Canada is the first central bank to pause the rate hike in this cycle back in March.
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