Frontier ($FRONT) surged from $0.50 on February 17 to a one-year high of $3.08 on March 17. The 500%+ price increase drew significant market attention to this token and its project. This bullish movement was halted with a sharp decline on March 18th, following a message on social media saying that DWF Labs had transferred over 1 million FRONT tokens to Binance. The price was cut in half in two days after reaching a one-year high on March 17.
Last week, MANTRA ($OM) outperformed the overall cryptocurrency market. It grew by 98.3%, while BTC fell by 13.7% during the same period. MANTRA is a layer-one blockchain focused on real-world assets (RWAs). The project team announced today that they have received a $11 million investment for their new funding round. RWA tokenization, along with AI and restaking, has been a key innovation sector this year, and the market is seeing significant capital inflows into it.
Solana, which is now ranked fifth by market capitalization in the cryptocurrency market, experienced a strong bullish movement last week. Its price once reached $210, a two-year high following the fall of the FTX. The strong market demand for Solana began in October 2023, when SOL was at $22. As the Solana ecosystem grew, so did the transaction volume on the Solana chain, and demand for SOL.
Overall Market
The above chart shows the BTC price movement since October 2023.
On March 14, BTC reached a new all-time high of 73,777 USDT, but a sell-off followed shortly. It fell more than 16% from the all-time high in just one week. One possible explanation is Genesis' liquidation.
As previously stated in mid-February, one of the potential selloffs could be caused by Genesis' liquidation of GBTC ETF shares. According to Bloomberg, Genesis Global Holdco LLC has been granted bankruptcy court permission to sell Grayscale Bitcoin Trust shares worth more than $1.3 billion to compensate clients who lent it digital assets when BTC was at $52k.
In one month, the BTC price increased by 40%, making the potential GBTC sale worth more than $1.8 billion. It's not surprising that Genesis wants to close this position as soon as possible and reap the benefits for its clients and creditors.
Compared to the $1 billion liquidation by the FTX bankruptcy trustee, the BTC price may find support above $60k, as indicated by the red box in the chart.
If the $60k support level cannot be maintained, the next strong support level will be around $50k.
Options Market
The above table shows the 25-delta skewness for BTC and ETH options.
Following the sharp selloff in Bitcoin and Ethereum, both assets experienced negative skewnesses in their short-term options.
Following the Dencun upgrade to Ethereum, ETH faced significant selling pressure. Furthermore, market expectations that the US Securities and Exchange Commission (SEC) would approve an ETH spot ETF in May have waned, lowering the asset's price.
The -14.79 skewness on 7-day expiry ETH options serves as a flashing warning to traders that the market is extremely bearish on ETH in the short term. In the last seven days, the spot price of ETH has dropped by 24.5%, from 4,098 to 3,092.
The aggressive selloff in BTC and ETH shifted market sentiment from bullish to extremely bearish a week ago.
Furthermore, the 30-day expiry ETH options is also seeing negative skewness, indicating that options traders are more willing to maintain a negative delta position on ETH for an extended period of time.
In contrast, BTC's 30-day expiry options exhibit a positive skewness. The market remains bullish on Bitcoin, despite the fact that it is only one month away from being halved. This sentiment extends to longer time frames.
Macro at a glance
Last Thursday (2024-03-14)
In February, US retail sales rose by 0.6% month on month, falling short of the expected 0.8% increase. Core retail sales rose 0.3% month on month, less than the expected 0.5%.
In February, the US PPI rose by 0.6% month on month, exceeding the expected 0.3% increase. The higher PPI growth rate raises concerns about a rebound in inflation, allowing the Federal Reserve to keep the current interest rate in place for a longer period of time before cutting it.
Last week, US initial jobless claims were 209k, lower than the expected 218k. Continuing jobless claims totaled 1,811k during the same period, less than the estimated 1,900k. Both numbers indicate that the US labour market remains strong.
On Monday (2024-03-18)
In February, the Eurozone CPI rose 0.6% month on month, compared to a 0.4% decrease in January. The annualised CPI growth rate dropped to 2.6% from 2.8% in January.
In its March meeting, the Reserve Bank of Australia maintained its interest rate at 4.35%, unchanged. Governor Bullock addressed the fact that inflation has moderated but remains higher than the target rate, and provided no hints about the future path of interest rates.
The Bank of Japan ended its negative interest rate policy and raised its interest rate to a range of 0-0.1% from -0.1%, for the first time in 17 years. The BOJ's interest rate decision caused a sell-off in the Japanese yen, which fell to more than 150 yen to the dollar. The end of the negative interest rate suggests that global M2 will shrink at a faster rate if the Federal Reserve keeps interest rates at their current level for longer. A shrinking global M2 will have a negative impact on all risk assets, including Bitcoin.
On Tuesday (2024-03-19)
The Canadian CPI increased by 2.8% annually in February, down from 2.9% in January. The core CPI increased by 2.1% annually during the same period, down from 2.4% in January.
The US building permit issuance was 1.518 million, exceeding the forecasted 1.5 million and January's 1.489 million. The higher-than-expected issuance number implied a positive US economic outlook and a stronger US dollar.
On Wednesday (2024-03-20)
The Federal Reserve will announce its interest rate decision following the March FOMC meeting. Based on recent strong economic data, the "higher for longer" narrative remains in play. The market expects the Fed to begin cutting interest rates in June, followed by three more cuts in 2024. The Fed's dot plot will be in focus because it will provide more clarity on the interest rate path in 2024.
Convert Portal Volume Change
The above table shows the volume change on our Convert Portal by zone.
This week, trading volume increased significantly in the Liquid Staking and Launchpad zones.
In the last seven days, the Liquid Staking Zone has experienced the greatest percentage increase in volume. The trading volume increased by 74.6%, with Jito ($JTO) driving the growth.
The Launchpad zone also experienced a 22.9% increase in trading volume on Convert. Tokocrypto ($TKO) is the primary driver of the volume increase.
Our desk also noticed that demand in the AI zone has decreased by 51.8%. After weeks of increased volume, trading demand for AI-related tokens decreased significantly. Our desk noticed that the majority of flows in the AI zone appeared to be focused on cashing out. Worldcoin ($WLD) was one of the tokens whose volume dropped.
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