DIA ($DIA) is a blockchain oracle platform that supports data for DeFi applications. In early September, DIA launched Lumina, an oracle stack built on Lasernet, an Ethereum layer-2 rollup. The DIA token will serve as the network's utility token, enabling staking and functioning as the gas fee token. This could introduce an additional burn mechanism for DIA and encourage users to stake their tokens, thereby locking up the supply. A portion of the revenue generated from the oracle will be allocated to repurchasing DIA tokens, enhancing value for holders. DIA experienced a remarkable increase of over 100% within three days, with trading volume exceeding 80 times its 30-day average on the spot market.
FTX Token ($FTT) saw a 52.2% rise over the past week, accompanied by a significant increase in trading volume on Convert. Speculation regarding the potential reinvestment of funds from the repayment of FTX to investors was a key driver behind FTT’s price surge. According to the filing from the now-defunct exchange last Monday, stakeholders have reached an agreement on the reorganisation plan.
This week, three meme coins—Bonk ($BONK), Shiba Inu ($SHIB), and Pepe ($PEPE)—made it to the list of the top 5 weekly coins of interest. All three coins posted positive returns last week, with trading volume on Convert rising by over 100%. The resurgence of these meme coins highlights a broader trend within the cryptocurrency market, where investors are increasingly drawn to the playful and community-driven nature of these assets. The vibrant communities surrounding these coins foster a sense of belonging and engagement, encouraging participants to share ideas, strategies, and memes that further fuel interest and investment.
Overall Market
The above chart shows the BTC price movement in the 8-hour chart.
Following last week's establishment of support for Bitcoin (BTC) at $63,000, the cryptocurrency surged past $66,000, buoyed by positive sentiment surrounding the stimulus package announced by the People's Bank of China (PBOC). The stimulus announcement led to a significant rally in the Chinese A-share market, with the Shanghai index surpassing 3,000 points.
On Friday, the Personal Consumption Expenditures (PCE) price index indicated that U.S. inflation is trending toward the Federal Reserve's 2% target, coinciding with BTC's rise above the $66,000 mark amid a weakening dollar.
However, we raised concerns regarding the sustainability of this upward momentum, noting a decline in trading volume within the spot market, which could signal a potential pullback as buying interest waned. The volume continued to decrease over the weekend, and as Asian markets opened on Monday, BTC began to retreat from its peak of $66,500. This pullback may be attributed to a shift in capital flows, with investors reallocating funds from cryptocurrencies to the Chinese stock market. The A-share benchmark index recorded its largest gain since 2008, indicating a strong bullish trend in that market and drawing attention away from digital assets.
On Monday, Fed Chair Jerome Powell emphasized that the Federal Reserve has no motivation for more aggressive rate cuts, asserting that all decisions are based on data. His comments bolstered the U.S. dollar and exerted downward pressure on BTC prices.
The sudden escalation of tensions in the Middle East on Tuesday prompted investors to move away from risk assets, such as U.S. equities and cryptocurrencies, in favour of the U.S. dollar and gold as safe-haven assets. BTC saw a 5% drop following Iran's missile strike on Israel, as fears of increasing geopolitical instability weighed heavily on the crypto market, bringing BTC down to around $61,000.
Based on our analysis, we anticipate that the downward trend line (the red line) will serve as support in the short term, likely within the $58,000 to $59,000 range. Should geopolitical concerns overshadow the optimism stemming from central bank liquidity injections, BTC could potentially decline further and test the strong support level at $52,000.
Options Market
The above table is the 25-delta skew on BTC and ETH options with different expiration dates.
Recently, a significant Ethereum whale, who was an early participant in the Ethereum ICO back in 2017, sold 19,000 ETH on the market. This individual originally acquired 150,000 ETH at the time of the Ethereum Genesis block. The sale has raised concerns in the market, leading to a more bearish outlook for ETH in the near term.
This bearish sentiment is reflected in the 25-delta skew data. For options expiring in 7 days, the skew for ETH options stands at -3.02, while the skew for BTC options with the same expiration is only -1.4. This indicates that options traders are more apprehensive about the potential downside for ETH in the short term.
The negative skew observed in both BTC and ETH options suggests a prevailing bearish sentiment towards both cryptocurrencies, likely influenced by escalating geopolitical tensions in the Middle East. However, for options with a 30-day expiration, traders appear to be more optimistic about BTC compared to ETH, as the skew for BTC options has turned positive whereas ETH options remain negative.
Interestingly, the skew for longer-dated options for both cryptocurrencies has shifted to positive territory, indicating a bullish sentiment as the year draws to a close. This aligns with our analysis predicting a potential all-time high before the end of 2024.
For options traders seeking to capitalise on the upside, constructing an options spread could be beneficial. This strategy involves using two call options with the same expiration date but differing strike prices. For instance, if a trader holds a bullish outlook on BTC by the end of 2024 but is uncertain about the extent of the price increase, a call spread would enable participation in potential gains at a reduced cost.
The trader would purchase a call option with a lower strike price set to expire in December 2024 and simultaneously sell a call option with a higher strike price, also expiring in December 2024. This approach allows the trader to collect a premium from the sale of the higher strike call option, effectively lowering the overall cost of the lower strike call premium.
Macro at a glance
Last Thursday (24-09-26)
In the United States, the number of initial jobless claims decreased to 218,000 this week, a decline from the revised figure of 222,000 (previously reported as 219,000) from the prior week, suggesting ongoing progress in the labour market.
Last Friday (24-09-27)
The US Personal Consumption Expenditures (PCE) price index, a key inflation gauge utilised by the Federal Reserve, recorded a monthly increase of 0.1% in August. This figure falls short of the anticipated 0.2% and is significantly lower than July's 0.5% rise. The annual rate has a 2.2% increase, which is below the expected 2.3% and July's 2.5% increase, bringing it closer to the Fed's target of 2%.
In terms of the Core PCE price index, there was a monthly increase of 0.1% in August, which is less than the forecasted 0.2% and matches July's performance. However, the annualised rate for the core PCE price index increased by 2.7% in August, aligning with expectations and slightly surpassing July's 2.6%.
After the PCE price index release, the dollar index declined to 100.157, marking a one-year low, as market participants anticipated a further 50 basis point cut by the Federal Reserve by year-end. Additionally, Bitcoin's price surged to approximately $66,500 during the US trading session, reflecting the market's reaction to the easing inflation in the United States.
On Monday (24-09-30)
China's central bank announced plans to instruct banks to reduce mortgage rates for existing home loans by October 31. This initiative is part of broader measures aimed at revitalising the struggling property market amid a slowing economy.
In Germany, the Consumer Price Index (CPI) recorded a 0% monthly change in September, falling short of the anticipated 0.1% increase. The annualised rate indicated a 1.6% increase for September, slightly less than the expected 1.7% growth and a decrease from August's 1.9% growth.
Federal Reserve Chair Jerome Powell stated on Monday that the recent 0.5 percentage point interest rate reduction should not be seen as an indication of similarly aggressive future actions. He expressed optimism regarding the economy's resilience and noted that inflation is expected to continue its downward trend.
Following Powell's remarks, the dollar index demonstrated strength, recovering from the one-year low on Friday, while Bitcoin's price fell from $66,000 to $63,500 in response to the strengthening dollar.
On Tuesday (24-10-01)
The eurozone has estimated a -0.1% change in its Consumer Price Index (CPI) for September, alongside a 1.8% increase on an annual basis. These figures are lower than the previous month's rates of 0.1% and 2.2%, respectively.
In the United States, job openings reported in the JOLTs for August rose to 8.040 million, up from July's 7.711 million, surpassing the anticipated 7.640 million openings.
During the US trading session, Iran executed a missile strike aimed at Israel, prompting a risk-off sentiment in the markets. This led to a decline of more than 1% in US equities and over 5% in Bitcoin prices, with the BTC price falling below $61,000. Meanwhile, gold prices rose above $2,670 as investors sought refuge in this safe-haven asset.
On Wednesday (24-10-02)
US ADP nonfarm payroll data indicates that private sector employment in the United States increased by 143,000 in September, with annual wages rising by 4.7% compared to the previous year. This stronger-than-anticipated growth in private sector jobs points to a recovery in the US labour market following the disappointing figures from August.
In response to this news, the dollar index experienced a slight uptick supported by a risk-averse market environment. Meanwhile, Bitcoin continues to face selling pressure amid ongoing tensions in the Middle East, dragging the broader cryptocurrency market back down from a rebound in the Asian trading session.
Convert Portal Volume Change
The above table shows the volume change on our Convert Portal by zone.
The price of Bitcoin (BTC) faced challenges in sustaining its upward trajectory, ultimately experiencing a pullback after reaching a significant resistance level at $66,500. This resistance proved to be a critical barrier, preventing further gains and prompting a correction in the market. Despite Bitcoin's struggles, the altcoin market showcased a different narrative, with several altcoins exhibiting strong demand, particularly within the meme coin sector.
In the Meme Zone, trading activity surged dramatically, with an impressive increase of 87.8% in trading volume. This surge was largely fueled by the performance of three of the top five trending assets of the week, which played a pivotal role in driving this remarkable uptick. The enthusiasm surrounding these meme coins reflects a growing interest among traders and investors, highlighting the dynamic nature of this segment of the cryptocurrency market.
Simultaneously, the Fan Token Zone also experienced a notable increase in trading volume, rising by 47.1%. This growth was primarily attributed to the AS Roma Fan Token ($ASR) and the Santos FC Fan Token ($SANTOS), both of which captured the attention of sports fans and investors alike. The engagement in fan tokens underscores the intersection of sports and cryptocurrency, as fans seek to connect with their favourite teams in innovative ways.
Moreover, the Seed Zone reported a significant rise in trading volume, with a 35.0% increase building on a previous growth of 58.2% from the week before. This sustained momentum indicates a growing interest in early-stage projects and tokens, with Pepe ($PEPE) emerging as a key driver of this heightened demand. The popularity of Pepe and similar tokens reflects a broader trend of investors seeking out new opportunities within the cryptocurrency landscape, particularly in areas that promise potential for growth and community engagement.
Why trade OTC?
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