Written By:, Marcus Wang and the Crypto Insights Team
Macro and Overall Risk Sentiment
Just as fundamentals were improving, the collapse of FTX.com — the biggest bankruptcy of the year in the crypto space — erased all progress and sent the entire market into a frantic spiral. The unraveling of one of the most influential centralized exchanges in the industry culminated in a bankruptcy filing at US federal court in Delaware last Friday. The filing included more than 130 entities tied to Bankman-Fried's crypto empire, with the Alameda petition denoting assets and liabilities of at least $10 billion each. Adding fuel to the fire, unauthorized withdrawals of funds drained $600 million from FTX's crypto wallets over the weekend, turning FTX apps into malware, which suggest a slimmer chance of FTX customers recovering their deposits. BTC plunged 21.9% week-on-week, recording its worst weekly performance since mid-June, when traders were grappling with the aftermath of the Terra blockchain implosion. ETH is down 22.14% in the same period.
Elsewhere in the market, US stocks gained surer footing last Friday, extending a rally sparked by a slowdown in inflation data. The dollar was on decline for the fourth consecutive week, the longest streak since March 2020.
BTCUSDT Perpetual
Following the news that Binance might acquire FTX, Bitcoin's price dropped to the previous consolidation area in the range of $18k to $20k. Subsequently, Bitcoin's price plunged to a level lower than June's lows on the back of Binance's backing out of the acquisition. Since then, Bitcoin has been range-bound between $16k to $17k, facing a resistance level at the 20-day EMA at $18.5k, where only a flip above this resistance level stands a chance to resume its bullish momentum. In the worst-case scenario, the maximum drawdown at 84.5% from previous bear cycles in 2013 and 2017 points to room for approximately 33% downside and an ultimate bottom sitting at $10.7k as of the time of writing. On a positive note, however, Reserve Risk, an on-chain indicator that represents the confidence amongst long-term bitcoin holders relative to the price of Bitcoin, displays a record high risk-reward ratio, while the stock-to-flow model, a barometer of Bitcoin cycles, reveals a stretched deviation of Bitcoin's price from its intrinsic value.
The annualized 7-day funding rates of the BTC perpetual across major exchanges have plunged to negative high single digits, while futures open interests in terms of BTC have only fallen moderately, indicating that massive short positions were added after FTX's implosion. Meanwhile, the BTC perpetual's average funding rate weighted by open interests was remarkably lower than June's lows, aligning with the extreme fear rating from the Fear & Greed Index.
Check Out the Latest Prices, Charts, and Data for ,BTCUSDT,!
ETHUSDT Perpetual
Unlike Bitcoin, Ether has not broken June's lows, with Ether's price hovering in the range of $1,100 to $1,250. The narrative that Ether turned deflationary in the past week for the first time since The Merge has possibly propped up the price. The immediate resistance sits at the 20-day EMA of $1,370, and only a flip above this level signals a meaningful trend reversal. From a technical perspective, RSI moves toward the oversold level on the 4-hour chart, while MACD indicates an impending negative crossover, suggesting short-term bearish sentiment from capital fleeing centralized exchanges.
The Ether perpetual's average funding rate, weighted by open interests, flipped from positive to negative. It remains slightly higher than the rate during The Merge-induced selloffs but significantly lower than the rate during June's massive selloffs. Similar to Bitcoin, the plummeting funding rate, coupled with elevated ETH-based futures open interests, suggests added bearish positions by investors on the heels of FTX's fallout.
Check Out the Latest Prices, Charts, and Data for ,ETHUSDT,!
Altcoin Outperformer
It's generally not a good sign when some of the top weekly performers are altcoins, but this token caught our attention with its market-defying surge. DYDX is up 21.4% week-on-week, fueled by the pivot towards decentralized exchanges (DEX) amid the FTX collapse. DYDX's unique DEX experience and technical structure seem to gain traction among the community, as trading volume on the platform surged to more than $2 billion over the weekend.
On the 1-hour chart, DYDX's price action saw double-digit percentage gains on Sunday. However, the price movement has become choppy in the $2.27 to $2.55 range and has since moved down to test the immediate support near the 50-hour EMA. On the 1-day chart, the MACD line has just crossed the signal line from below, suggesting the current bullish sentiment may be here to stay. Meanwhile, RSI remains in the neutral zone, indicating that the sentiments are still in check.
Check Out the Latest Prices, Charts, and Data for ,DYDXUSDT,!
Market Movers (Week-on-Week)
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,DYDXUSDT, (+19.9%)
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,GMXUSDT, (+3.9%)
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,SOLUSDT, (-61.3%)
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,CROUSDT, (-51.0%)
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,APTUSDT, (-46.6%)
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