Weekly Market Review｜Week 2 July 2021
Market review and outlook:
We had a break in week 28-29 (9/7-23/7), not much action was seen across the mainboard but there was some capital market development which we will wrap into this week’s recap. Heat is finally back in week 29 with BTC and ETH carrying most of the inflow, BTC up 25% past 5 days and slightly edged over the 40k handle which is a 100day MA, ETH up 20% at one point touching 2400 level however lose some steam and retreats back to 2K at the time of writing. BTC does have more upside at the moment looking upwards to 46K if it can consolidate at 35K, ETH on the other hand looks to be bounded at this level as its longer range averages (7/25 weeks) clipped it between 2.1 and 2.2K. Volume-wise BTC did fair better still and we believe more buying will be in BTC as well in the coming week for the reason above.
In the derivs market, BTC and ETH OI ticked up in a similar percentage ~11% the past 5 days. Swap funding rates are getting slightly more negative as underlying spot prices rose, possibly contributing to a loss in momentum as we hit those higher moving averages bound in both coins. Options markets haven’t seen very wild swings too with BTC IV moving slightly to mid-80s and ETC IV mid-100s, both remaining below the previous high clocked earlier week 29 when the market first started to turn.
Alt universe sees more limited price actions, the top 10 market caps bar BTC and ETH all look to be bounded by their upper moving averages, say, Cardano, lacks the volume to break thru 1.33 level the past weekend. BNB Binance coin appears the same with its lower. Speculators favorite XRP and DOGE both drew down very quickly after attempting a 12 and 15% daily gain, XRP has a better stance at the moment having some headroom to its nearest moving average while DOGE does seem to be bounded by 0.22 handle.
Most news this past 2 weeks centred around notable fundraising with FTX’s $900m raise, making it the third most valuable crypto business at $18b. Robinhood is also going for an IPO eyeing a $35b valuation. Fireblocks the institutional settlement manager also sees its valuation topped up to $2b after a $310m fundraiser and Binance US arm binance.us is rumored to be gunning for a US IPO. Opensea the leading NFT marketplace also went past the unicorn mark concluding its series B, making them a $1.5b worth company on paper. It is clear that a lot of big players are taking this rather quiet period of the crypto market to expand their warchest which reflects a very strong underlying sentiment through the industry as a whole.
The other big topic that dominated the news segment the past 2 weeks has to be miners, specifically, where are the Chinese miners heading? Kazakhstan pops up a lot with Bitmain going in strong providing rigs to a 180MW facility with Engenix, that is after Bit Mining announced a 100MW plan in the same country just a week ago. The country is set to benefit plenty after announcing an electricity surcharge earlier this year to the mining industry. The US is getting some popularity too, particularly in counties that have hydro or nuclear power excess, Oklo, an Idaho based nuclear power plant operator just went into a deal to supply Compass the mine operator for 20 years worth of electricity, and even more extraordinary move is Albany Engineering, which owns a century-old hydro plant, came public to say it is more rewarding to mine bitcoins themselves than selling electricity to the national grid. These players will most likely sell the coins they minted right away for cash which we imagine will provide a steady stream of sellers in the market in the coming years.
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