Cryptocurrencies rose on the wave of Wall Street's euphoric reaction yesterday. The decelerating rise in inflation and the decline in the strength of the dollar are fueling positive risk sentiment. Just two nights ago we saw the total capitulation of the cryptocurrency market, eventually the bulls decided to break the bearish streak. At the end of the week, however, short-term investors may want to take profits, and news circulated in the industry that another cryptocurrency institution, BlockFi, had halted its withdrawals. The market is reading this as the first harbinger of the domino effect of the insolvency of the FTX exchange and the Alameda Research fund:
- Bitcoin is trading around $1,17,300, Ethereum on the other hand at $1,270. Against the altcoin backdrop, Litecoin, Neo, Dydx and Kiloshib are the best performers. Inflated by its partnership with Meta Platforms, Polygon retreats to $1.05 per token. The market's capitalization has once again fallen into the neighborhood of $830 billion;
Sam Bankman-Fried's fortune recently valued at nearly $16 billion evaporated in just a few days. The billionaire has disappeared from the Billionaires Index according to Bloomberg. Source: Bloomberg
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Open real account TRY DEMO Download mobile app Download mobile app- BlockFi is a cryptocurrency lender that announced today that it has suspended payouts to platform users due to the highly uncertain situation of the FTX exchange and Alameda Research. Customers' funds have been frozen in the platform. The company was fined $100 million by the US Securities and Exchange Commission (SEC) a few days ago. On November 9, the company's chief executive Flori Marquez reported that FTX had opened a $400 million line of credit for the company, information from Autism Capital also confirmed this;
- The bitcoinist.com portal reported that BlockFi had hired a bankruptcy counselor at an express pace. Back in August, BlockFi was hailed as the fastest-growing private company in the United States. The situation seems very similar to what we saw with the Celsius Network platform or the 3AC fund, which collapsed in the wave of Luna's implosion.
Derivatives market investors remain bearish on Ethereum. The chart will erase the 3-month annualized premium for futures. Source: Laevitas
- The above indicator should show a premium of between 4% and 8% to cover the financing costs and associated risks. Given this data, we can see that derivatives traders were clearly bearish for the past month. Ethereum futures premium remained below 0.5% almost all the time. In addition, it entered the so-called backwardation (a situation when futures contracts with the nearest expiration date are trading higher than those with longer expiration dates), which means that demand for bearish bets is now extremely high. Sellers are agreeing to incur a nearly 4% annual cost to keep their positions open. The data shows widespread reluctance among traders to take leveraged long positions despite the increasingly attractive costs of such bets.
The significant deviation (delta) of the 60-day options market curve is a telling sign of when derivatives market makers and arbitrage bureaus are overpaying for upside or downside protection. Current levels indicate 25% which illustrates the extreme negative sentiment towards Ethereum. Source: Laevitas
- During a bull market, options traders obviously give the price a better chance to fall, causing the curve to rise above 10%. In contrast, the bull market tends to bring the index to negative levels, even below 10% - in which case bearish put options trade at a discount. The 60-day delta as recently as October 26 was almost zero, showing that traders were unsure of Ethereum's further movement;
- However, the indicator rose powerfully on November 8 and is now indicating levels at 24 that could herald a peak in the panic. At the same time, however, the effects of the collapse of FTX and Alameda may still be felt and depress industry sentiment, so a decisive drop in the indicator still seems unlikely as long as traders. An additional fear factor may be the decisions of regulators.
Bitcoin chart, H4 interval. Bitcoin roughly a year ago was at historic highs at $68,000. Currently, the price of the major cryptocurrency is moving in a short-term downtrend and trying to unwind the huge declines. Looking from the point of view of candlestick analysis, we can observe a bullish 'three white soldiers' formation, the continuation of which should be a further attempt to change the downward trend. Source: xStation5
