Celestia ($TIA) had outperformed in the previous seven days, rising 17%, while BTC rose 1.5% and ETH fell 0.5%. The native network staking service allows investors to stake TIA with annual yields ranging from 15% to 17%. Staking services have increased demand for this cryptocurrency. There are also expectations of future airdrops to stakers from projects built on the Celestia blockchain.
Last week, Stacks ($STX), a Bitcoin layer-2 network for smart contracts, received a lot of market attention and gained 14.5%. This cryptocurrency is being pursued in the Korean market. As a result, it was trading at a significant premium to the Korean won. The hype stemmed from the story of a Bitcoin spot ETF approval, which will boost the BTC price and benefit the STX price due to its high beta profile.
Meanwhile, Aribitrum ($ARB), an Ethereum layer-2 network, attracted market attention as trading volume on the decentralized exchange GMX increased. The decentralized exchange protocol GMX is deployed on two EVM chains, Arbitrum and Avalanche, and the increased trading volume resulted in an increase in the Arbitrum network's gas fee..
Overall Market
The above chart shows the BTC price in the past two months.
On Monday during the American session, the Bitcoin price successfully broke through the $45k key resistance level and closed above it. The increased trading volume, combined with the rally, suggests that the market was optimistic about the SEC's approval of the BTC spot ETF this week, and traders were attempting to front-run the Wall Street asset managers.
The $45k level has now become a strong support level for the Bitcoin price.
After the US markets closed on Tuesday afternoon, the SEC account on the social media platform X posted a message stating that all BTC spot ETFs had been approved. The price of bitcoin fluctuated between $47,972 and $44,748 after SEC Chairman Gary Gensler posted on X with his personal account that the SEC account had been compromised and that the BTC spot ETF had not been approved.
The dramatic change in the BTC price demonstrated that the market was easily manipulated by headlines, and that market volatility was extremely high. As the market awaits the SEC's approval result, which will be announced after the US market closes tomorrow, the BTC price may experience another volatile session. Either approval or rejection could cause the BTC price to move by 5-10% in a matter of minutes.
When trading this critical event, our desk advises investors and traders to be aware of the volatility and use good risk management.
Options Market
The above chart shows the 25-delta skewness for BTC and ETH options.
This skewness data is used to gauge market sentiment by comparing the 25-delta call premium and put premium. A positive value indicates that option traders are willing to pay more for call premiums.
The skewness of BTC options is negative for short-term options. Our desk observes a skewness of -3.75 on options with a 7-day expiry and a skewness of -1.94 on options with a 30-day expiry.
It implies that on the options market, options traders are longing for near-term puts and shorting for near-term calls. Given the high premium on near-term options, it is beneficial to mitigate downside risks for investors and traders who have spot BTC positions and earn a good premium.
As we get closer to the SEC's decision on Bitcoin spot ETF approval, using options to hedge the risks would be a savvy strategy.
Macro at a glance
Last Thursday (2023-01-04)
Germany's CPI was projected at a 3.7% growth rate on a yearly basis in December 2023, higher than the previous month’s 3.2%. It shows that the inflation rate in Germany rebounded, which might increase the odds for the ECB to maintain its interest rate at the current level for a longer period of time.
US ADP nonfarm employment increased by 164k in December 2023, higher than the estimated 115k and the previous month’s 101k. The better-than-expected nonfarm employment increase suggests that the US economy is recovering and employers are hiring more employees for business.
US initial jobless claims were 202k last week, less than the estimated 216k and the previous week’s 220k.
Last Friday (2023-01-05)
Eurozone CPI was projected at a 2.9% growth rate on a yearly basis in December, slightly less than the estimated 3.0%. However, it popped from last month’s 2.4% CPI growth rate. The rebounding CPI number could lead to a “higher for longer” interest rate environment in the Eurozone.
US unemployment rate in December was 3.7%, the same level as it was last month. The low unemployment rate suggests that the US labour market remains tight.
US ISM Non-Manufacturing PMI surprisingly dropped from 52.7 in November to 50.6 in December. The PMI reading in December was above the 50 line, but the decline raised a bit of concern for the US economy. PMI reading was a proxy to measure business activities, and a below-than-fifty reading suggests a contraction in business activities.
On Tuesday (2023-01-09)
Eurozone unemployment rate was 6.4% in November 2023, slightly better than October’s 6.5%.
Convert Portal Volume Change
The above table shows the volume change on our Convert Portal by zone.
In the last seven days, our desk has noticed a significant volume change in the above zones.
Last week, trading volume in the NFT zone had the largest increase across the board. Origin Protocol ($OGN) and Blur ($BLUR) are the two main contributors to the volume growth.
In Meme zone, our desk witnessed a massive increase in trading volume on Dogecoin ($DOGE) and Floki ($FLOKI) over the last seven days. It seems the dog meme coins were getting market attention with large block trades.
Our desk also noticed decreased trading volume in the Metaverse zone and AI zones. While the NFT zone was getting more flows over the desk, the Metaverse zone was showing the difference. It could be the capital allocation by investors to bet on these two zones.
Why trade OTC?
Binance offers our clients various ways to access OTC trading, including chat communication channels and the Binance OTC platform (https://www.binance.com/en/otc) for manual price quotations, Algo Orders, or automated price quotations via Binance Convert and Block Trade platform (https://www.binance.com/en/convert) and the Binance Convert OTC API.
To access manual price quotations, you may visit our Binance OTC platform (https://www.binance.com/en/OTC-Trading/spot), where you can RFQ (request-for-quote) and trade directly with our OTC trading team via a live chat.
To utilise our Algo orders features, you may visit our BinanceAlgo Orders platform (https://www.binance.com/en/OTC-Trading/AlgoTrading).
For any other inquiries on OTC trading, please reach out to us via our email at [email protected] for our trading desk to get in touch with you and get started.
OTC trades may also be automatically quoted on Binance Convert and via API, offering users a quick and simple way to execute trades across 60,000+ pairs with one simple click. Binance Convert supports over 350 tokens listed on the exchange including fiat pairs. Begin trading from as little as 1 USD. To start, simply navigate to the Binance Convert & Block Trade platform (https://www.binance.com/en/convert), select the coins you wish to trade, preview and confirm the quote with settlement reflecting almost instantly in your wallet balance. For details and access to Binance Convert OTC API, please refer to our Convert Endpoints (https://binance-docs.github.io/apidocs/spot/en/#convert-endpoints) and reach out to us at [email protected] if you have any questions or require assistance.
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