23k BTC on CME Futures and 50k BTC in Options Expiring Today

Bitcoin is currently down 0.05% in the past 24 hours trading around $6,640 after hitting $6,872 last night, yet again rejected at $7,000 level. Interestingly, more than 340,000 addresses are holding about 236k BTC at about $7k level.

According to trader Nebraskan Gooner, the crypto asset is working in a tight range. A daily close above $6,750 he said “would surely” take us above $7,000 while the close below $6,400 means, falling to $5900 and even $5200.

Bitcoin has also printed a death cross, which indicates a potential for major sell-off. This technical chart pattern has been a reliable indicator of some of the most severe bear markets in the traditional markets which is now seen in bitcoin.

But bitcoin volatility could see a further hike as futures contracts on CME and options expire today.

Activity on CME has been declining ever since February when the price of Bitcoin was trading around $10,500. Crypto data provider TradeBlock, noted,

“March bitcoin futures trading volume at the CME declined despite elevated volatility in spot markets for the month. While the CME’s bitcoin futures product saw record volumes in January and February, March activity has fallen considerably.”

Source: @TradeBlock

As for today’s futures contract expiration, Bitcoin futures on regulated exchange CME has about 23,000 BTC worth over $150 million in open interest for March 27th contracts.

Besides bitcoin futures, options are also expiring today. About 50,000 BTC options worth about $330 million are outstanding on crypto exchanges, out of which $50 million are in open interest on March 27th expiry on Deribit.

“For reference, the Deribit Exchange open interest on options last year was half the value of open interest that is present on exchange now. ($300m -> $600m). The same case for BitMEX March 27th futures,” noted Trajan.

Skew-Total-BTC-Options-Open-Interest
Source: Skew.com

According to Su Zhu, CEO of Three Arrows Capital this quarter is “very important” to watch. It is expected that the expiry of Bitcoin futures and options would result in heightened volatility.

Zhu further noted, “Last yr market bounced quite aggressively from backwardation to contango after the expiry.”

Backwardation is when the spot price of an underlying asset is higher than the futures price while Contango is when the price of a commodity is higher in the futures market than the current price of the commodity. Now it’s to be seen if we will see the same scenario happening this time as well.

Backwardation is happening in both gold and bitcoin which Zhu said could be because “mkt has re-learned fear and is showing preference for owning actual assets vs owning derivatives of those assets.”

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Author: AnTy

The World Has Gone Full Crypto in 2020; Volatility is Up, Stocks Are trading like A Sh*tcoins

The global markets are on a rollercoaster for the past few weeks, one day they are recording historical one-day gains the next they are tumbling into the abyss.

Just yesterday, Wall Street Journal’s latest heading read, “A new bull market has begun. The Dow has rallied more than 20% since hitting a low three days ago, ending the shortest bear market ever.”

And this has been after the Dow Jones Industrial Jones rallied 6.4% after the $2 trillion stimulus got closer to getting the green light. The blue-chip index has been up 20% from its low, which is the textbook definition of a new bull market.

As per the Investopedia definition, “the most common definition of a bull market is a situation in which stock prices rise by 20%, usually after a drop of 20% and before a second 20% decline,” although it does mention there is no metric to identify a bull market.

This jump reportedly ended the 11-trading day bear market, marking it the “shortest in history for the Dow.”

Besides stocks, crude oil has also been plunging ever since the oil price war was started by Saudi Arabia and Russia. As Bloomberg notes, Canadian heavy crude has become so cheap its shipping cost is more than the value of the oil itself.

Every stock trading like a “sh*tcoin”

While new for the stock market, these kinds of moves aren’t anything new for the crypto market. Recently, on Black Thursday, Bitcoin dropped over 50% in a two-day period.

Now, the global stock market is experiencing such high volatility, which momentarily went past that of bitcoin. And the market is divided into those who believe that from here the market would move on to yet new highs again while the other side believes a lot more pain is to come in the light of lockdowns and possibility of a recession.

All of this has is resembling a crypto market, as economist and trader Alex Kruger said,

“In 2020 the world has gone full crypto. Full crypto you know. In crypto half the people think prices will “moon”, while the other half think it’s all a ponzi.

In the world now half the people think coronavirus is a sham, while the other half think everything will collapse.”

According to him, with volatility “up the roof,” every stock is trading like a “sh*tcoin.”

“Assets can’t be valued any longer because nobody knows anything, (…) sounds very much like crypto to me,” Kruger said.

Fed Balance Sheet Jumps to a New High

On Thursday another big and devastating news came in the form of the number of people seeking jobless benefits.

In an unprecedented surge, a total of 3.28 million has been reported by the US government to have filed for unemployment insurance in the week ended March 21st. These levels exceed those reported since 1967.

“This morning’s data leaves no doubt that the economy is currently in a recession,” said Matthew Luzzetti, chief U.S. economist at Deutsche Bank AG.

In April, this unemployment rate is expected to touch 5.5% but won’t be the peak. The US meanwhile is awaiting a $2 trillion stimulus package for approval to boost the benefits for those who got laid off.

Besides providing for the unemployed, a huge chunk of money is being used to bailout institutions. The Federal Reserve has long been injecting liquidity into the financial markets and recently announced unlimited QE.

This has the Fed balance sheet jumping to a new high of $5.254 trillion, with the largest ever weekly increase of $586 billion made last week.

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Author: AnTy

FDIC Urges People to Not Pull Money Out in a Desperate Attempt to Avoid A Bank Run

In the past weeks, investors have fled out of risky assets that resulted in equities, oil, cryptos to even gold and bonds falling in prices. The risky assets along with traditional safe haven assets were left out in favor of cash.

As usually happens in times of crisis, investors turn to hoard cash by selling everything they can get their hands on. However, people stockpiling indicates a cash crisis might be brewing. Interest rate cuts to zero percent and even in negative territory isn’t helping the case for banks either.

Yesterday, the Federal Deposit Insurance Corporation took to Twitter to advise people against withdrawing money and hoarding, cash emphasizing that “the safest place to keep your money is in the bank.”

In this less than a minute long video, FDIC talks about how in the current unprecedented times of novel coronavirus, people are fearful about what they should be doing with their money when they needn’t be because “your money is safe at the banks.” FDIC said,

“The last thing you should be doing is pulling your money out of the banks now thinking it is going to be safer someplace else. You don’t want to be walking around with large wads of cash and you certainly don’t want to be hoarding cash in your mattress. It didn’t pan out well for so many people.”

The corporation said, “no depositor has lost a penny of their insured deposits since 1933 when the FDIC was created,” as such “if you’re talking about having your money in a safe place, please keep it in an FDIC-insured bank.”

“You nervous about something?” is what Nik Carter of Coin Metrics responded with.

Bank Runs

In times of economic hardship, everyone makes a dash for cash and this time as it is happening, banks are struggling to provide liquidity.

According to reports, the likes of Bank of America, JPMorgan, and Chase are limiting the withdrawals. These banks have capped the limit between $3,000 to $10,000 in some of the areas.

“We don’t keep large amounts of cash in big bills in the branches because it’s dangerous for our employees and there is low demand,” said BoA.

However, there are no such limits on withdrawing crypto, as long as you are the one that owns your keys. But during the recent market carnage, the fact that cryptos also crashed hard has some in doubt.

However, it must be noted that so did gold just like it fell in 2008 during the financial crisis but only to emerge as the winner. And the same is expected of the deflationary Bitcoin with a hard cap of 21 million, unlike the US Dollar, that the Federal Reserve keeps on printing more and more.

As BitMEX in its recent report noted, “Where the Bitcoin price may shine is in the volatile inflationary aftermath of the response to the crash.”

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Author: AnTy

Demand for Internet Dollars: Crypto Investors Pile into Stablecoins for Safety

Over the past few weeks, stocks markets, crypto markets, everything took a brutal beating amidst the fear of coronavirus pushing the market into recession. Investors have been selling everything they can get their hands on, even safe haven assets like gold and bonds got sold off in a rush to the safety of cash.

From bankers, companies to individual investors, everyone has been dashing to stock up on cash to ride out the chaos. This flight to cash is causing havoc in a market that hasn’t been seen since the financial crisis over a decade ago.

The key concern now is liquidity, the ready availability of cash and other easily traded financial instruments for which the central banks have been pumping trillions of dollars in the market.

The lack of liquidity also saw non-US borrowers paying a premium to access dollars. The forex markets have been extremely volatile this week as small currencies depreciated dramatically against the US dollar as the investors seek a safe haven.

The three-month euro-dollar and dollar-yen swap spread rose to their widest levels since 2017 only to drop after central banks pumped in cash.

Central banks all over the world have also lowered their interest rates and introduced stimulus packages to dampen the negative effects of the coronavirus crisis.

Cryptos’ “Flight to Safety”

The same way there is a flight to the US Dollar amidst the global instability, in the crypto market, money is pouring into stablecoins.

While during the past few weeks, bitcoin and altcoins got hammered, the market cap of most of the stablecoins increased, reinforcing that investors are piling into crypto cash equivalents.

From March 10th through March 15th, Ethereum-issued Tether (USDT_ETH) market cap increased by about $300M. Coinbase and Circle’s joint effort, USD Coin (USDC) also had a huge gain, growing close to $150M in market cap since March 10th, reported Coin Metrics.

Recently, Circle CEO Jeremy Allaire tweeted about USDC’s market capitalization reaching ATH, “Fascinating to see “flight to safety” within the crypto macro market, but also demand for high quality USD liquidity for markets.”

In his series of tweets, Allaire shared his excitement, “It’s still rewarding to see that this entirely new, entirely digital, blockchain based monetary infrastructure is working.”

“Demand for internet dollars — digital, fast, global, secure, cheap to use — should increase significantly. People and businesses will want an architecture where they can make and receive payments with less counter-party risk and more security,” added Allaire.

Fiat is Winning

Stabelcoins provide ease of access to investors and traders along with enhanced liquidity. This led popular stablecoin Tether (USDT) to surpass the market capitalization of $5 billion “amid a surge in interest in crypto’s most liquid, stable and trusted currency,” and take over XRP’s second position, as per Messari.

Binance’s stablecoin also jumped into the race, the US-dollar pegged Binance USD (BUSD), which surpassed $100 million in mark cap in just six months. Ethereum-based BUSD trades almost exclusively on the Binance exchange and is backed by US dollars in an FDIC-insured US bank and audited on a monthly basis.

Cash is king and as evident from the increase in the stablecoins’ market cap, even in the crypto space, fiat is winning.

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Author: AnTy

Bitcoin Price (BTC) Eyeing Strong Comeback After A Massive Fall

Bitcoin price tumbled more than $5,000 in the past two days. BTC to USD is currently correcting higher from $3,865 and it is likely to continue higher towards the $6,000 and $6,200 levels.

Key Takeaways: BTC/USD

  • Bitcoin price fell significantly from well above $8,200 and it tested the $4,000 area against the US Dollar.
  • BTC/USD is recovering and trading near the $6,000 resistance plus a bearish trend line on the 2-hours chart (data feed from Bitstamp) to enter a bearish zone.
  • Ethereum is also recovering from well below $100.00 and it is now trading above $125.00.

Bitcoin Price Analysis

In the past few sessions, there were heavy swing moves in bitcoin price below the $8,000 and $6,000 support levels. BTC to USD broke multiple supports near the $5,000 and $4,800 levels to extend its decline.

Bitcoin Price Analysis

Looking at the 2-hours chart, bitcoin even traded below the $4,200 support level and settled below the 50 simple moving average (2-hours, purple). Finally, there was a break below the $4,000 handle and the price traded as low as $3,864.

It is currently correcting higher and trading above the $4,500 and $5,000 levels. The bulls were able to lead the price above the 23.6% Fib retracement level of the recent dive from $8,021 to $3,864.

It seems like bitcoin price is recovering and trading near the $6,000 resistance plus a bearish trend line on the same chart. The 50% Fib retracement level of the recent dive from $8,021 to $3,864 is also acting as a resistance near the $5,942 level.

If there is an upside break above the $5,940 and $6,000 resistance levels, the price could start a strong increase. The next resistance area is seen near the $6,260 and $6,433 levels.

The later one represents the 61.8% Fib retracement level of the recent dive from $8,021 to $3,864. Any further gains might call for a push towards the $7,600 resistance area.

Conversely, bitcoin price could fail to continue above the $5,940 and $6,000 resistance levels. In the mentioned case, there are chances of another decline towards the $5,000 level.

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Author: Aayush J

Nearly $10 Million XRP Transferred to Former Ripple CTO Jed McCaleb Wallet

The third-largest cryptocurrency is back in the red, in line with the broad crypto market. In the past 24 hours, XRP lost 9.43% of its value, currently trading at $0.218. In the past month, the digital asset has lost nearly 22% of its value but is still up 18% in 2020 so far.

Interestingly, after bitcoin’s over 7% losses, XRP recorded the least percentage of losses among the top ten cryptocurrencies while EOS is down 14.52%.

These losses came amidst the transfer of over 41.2 million XRP worth about $10 million was from former Ripple CTO Jed McCaleb’s Settlement to Jed McCaleb’s wallet.

This much amount of XRP is expected to hit the market soon and when it does, it would put additional selling pressure on the crypto asset’s price which is already in the red.

As we reported earlier last month, Ripple co-founder selling his XRP is “insignificant” compared to the total trading volume of the digital asset per day.

McCaleb also sold a portion of his 19 million XRP in January but the price still surged over 27%. In total, he has sold 1.05 billion between 2014 and 2019, out of the 9 billion he received as part of his compensation for his role in Ripple.

Apart from co-founding Ripple, McCaleb also founded the infamous Mt. Gox but left it before the exchange went down. He has also created another cryptocurrency Stellar Lumens (XLM), currently ranked at 14th place trading at $0.0521, down 13.59% in the last 24 hours.

McCaleb still has about 5% of the total existing supply left to be dumped on the market. Overall, this XRP whale doesn’t appear to have much of an impact on the XRP price, although the “economic power and consequences of whales cannot be ignored.”

No mechanism to prevent XRP from being created by a bug

Elsewhere, current Ripple CTO David Schwartz shared that there is no freezing of other people’s XRP, on the question of if XRP can be frozen or locked out. He further elaborated on what could cause XRP to be created or destroyed.

“There’s no mechanism in the software to create XRP and safeties to prevent it from being created by a bug or trick. There’s no freeze or lock for other people’s XRP since nobody would be entitled to that capability. You can easily lock or destroy your own XRP if you wish,” said Schwartz.

Schwartz further clarified that the validators can’t burn the XRP in your wallet either as servers count the number of validators that agree with it and such validators would be simply counted as disagreeing, “potentially halting the network if too many of them did this.”

And if they change the rules, that would effectively be a hard fork.

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Author: AnTy

This Indicator Suggests Bitcoin at the Beginning of a Bull Market

  • Bitcoin Unrealized Profit is at a healthy level, that is similar to the beginnings of past bull markets
  • Despite Bitcoin losing 16% of its value last week, whales and long-term bitcoin holders are not selling their BTC

Bitcoin price might have lost 16% percent of its value last week and recovered some of the losses back, but the market hasn’t topped yet.

According to the unrealized profit of bitcoin, we just might be at the beginning of a bull market. Relative unrealized profit is the total profit in USD of all the coins in existence whose price at realization time was lower than the current price normalized by the market cap.

This indicator was at its highest at just above 0.85 in June 2011. In April 2013, it yet again reached 0.82 before dropping to 0.30 in Sep. 2015.

During the last bull run, in Dec. 2017, Bitcoin Unrealized Profit jumped to 0.77 only to drop to 0.32 in Feb. 2019. On Feb. 24, the bitcoin unrealized profit was at 0.463.

Bitcoin HODLers Holding their BTC Tight

According to yet another indicator, coin days destroyed, the whales and long-term bitcoin holders aren’t off-loading their bitcoin amidst the coronavirus scare. On-Chain data suggests both are sitting “firm and tight” on their bitcoin, said crypto investor and researcher Cryptokea.

The sell-off recorded last week was on par with prior bull markets and nothing extraordinary has been registered yet.

Source: @CryptoKea

The metric Coin Days Destroyed (CCD) measures the total HODL age of bitcoins moved on a given day which is calculated by multiplying those coins with the number of days they are held.

It becomes supply-adjusted CDD, when adjusted by the total supply of bitcoin. If long term bitcoin holders sell larger than usual portions of their holdings, this metric jumps “noticeably.”

But currently, the selling is “on par with prior bull market sell-offs,” especially in comparison to the periods around the reward halvings, which is coming in May.

Previously, he noted that bitcoin’s bull cycle, bottoms, and tops fluctuate around halving dates in an “almost equal ratio.” And though history never repeats itself, it does often rhyme.

“If this relationship were to hold true, we still have more than 570 days of bull market ahead of us, with a cycle top coming in around Sep 2021.”

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Author: AnTy

Analyst Says Tezos Could ‘Get Pretty Ugly’ While XTZ Shorts Climb To An All-Time High

  • XTZ up 778% in the past year, surging to a new high of $3.40
  • Baking and stable protocol pushing the prices up but more people entering the market creating a “snowball effect”
  • Baked XTZ has no lock-up period and shorts are climbing to ATH, so a reversal expected that has the potential to get ugly

Tezos has been a hot cryptocurrency since last year where it jumped 778%. So far in 2020, we are up 140% leaving bitcoin’s gains in the dust.

Today has turned out to be yet another amazing day for XTZ as the digital asset jumps over 20%, making a new high at $3.40. In the past month, XTZ surged 94% against BTC and 40% against ETH.

The record ICO making record gains

A record-breaking initial coin offering (ICO) in 2017, the project collected $232 million and officially launched in Sept. 2018. The Tezos blockchain uses a native-middleware called “Network Shell” allowing them to develop a self-amending ledger.

Its blockchain protocol is divided into three layers; the network protocol is responsible for peer broadcasting between nodes, transaction protocol defines the accounting model implemented by the blockchain, and the consensus protocol helps the chain reach agreements on the state of transactions.

Tezos is a Liquid Proof of Stake system which unlike Delegated proof of stake (DPoS) has no hard and fast rule that delegates the selection. The system requires one to stake a certain number of XTZ to participate in the consensus, a process called baking. The bakers or token holders can delegate their validation rights to other token holders as well without transferring ownership but is optional.

Bakers get the block publishing rights based on their stake and successful bakers get a block reward and get to charge transaction fees for all the transactions inside the block.

Stable Protocol and Baking Pushing XTZ Up

Currently, nearly 80% of XTZ is baked with 15% of all XTZ circulating supply held in exchange bakeries. Coinbase is leading this with over 44% share followed by Kraken (22%), and Binance (15%).

Baking has put a constraint on the supply while demand keeps on rising as the operator “needs to continue to buy more as they go.” This has the XTZ price soaring. However, they have no lockup period so these staked XTZ tokens “can be pulled at a moment’s notice.”

Also, with people starting to enter into Tezos due to the appreciating price and the additional stake reward are creating a “snowball effect,” which Mati Greenspan, founder of Quantum Economics notes, says “causing even further momentum on the price.”

While one reason behind this surge is the staking mechanism, the other reason is it protocol that is looking more stable and scalable than some of its competitors, said, former eToro analyst.

But Things Could get Ugly

The price of XTZ can certainly push higher but investor and trader Josh Rager says “based on the chart, I’m not going to FOMO into this (at this point in time). Certainly an asset I’m willing to buy on pullbacks for swing trades.”

Greenspan also issues a word of caution,

“There’s no telling just how high this might go but I have a feeling that when we do finally see a reversal it does have the potential to get pretty ugly.”

Just like Greenspan, these highs certainly had the traders anticipating a pullback as XTZ shorts reached an all-time high. However, trader, Crypto Michaël wishes “everyone all the best shorting this.”

However, the google trends for search term Tezos are looking for another big uptrend which is a bullish signal.

Source: Google Trends

XTZ is currently fast approaching $3.50 while leading the market gains. But while the shorts are on the rise, so is the trend for the cryptocurrency, now it’s to be known if we will continue this climb or take a break.

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Author: AnTy

Pushing ETH’s Trillion-Dollar Case? DeFi Hits Historic Day With $1 Billion in Total Locked Value

  • DeFi breaks $1 billion record, seeing a growth of over 200% in the past year
  • Moving towards the trillion dollar case for ETH

In a new milestone, Decentralized Finance has surpassed $1 billion in total locked value, according to Defi Pulse.

DeFi leverages decentralized networks to transform the traditional financial products into transparent and trustless protocols.

Earlier this year, this amount was under $700 million and now in just a month, we crossed the $1 billion threshold. Over the past year, the total value locked in DeFi has recorded a growth of more than 200%.

“DeFi AUM: from one million to *ONE BILLION* in only 878 days. A historic day,” commented Spencer Moon, Head of Crypto Investments at DTCCapital, a crypto-focused investment fund.

Out of these $1 billion locked amount, $678 million belongs to Ethereum as 3.1 million ETH are locked in DeFi projects in comparison to 1.6k of Bitcoin (worth $15.6 million) and 66.5 million of DAI (worth about $67 million).

Currently, the Ethereum-based lending platform Maker has a dominance of 59.75% in DeFi space.

Ethereum Enjoying DeFi’s Success

Ethereum is clearly establishing itself as the protocol to become the foundation for the new decentralized financial economy. According to ConsenSys’ 2020 prediction,

“There will be an explosion of synthetic assets and new derivatives which will create tens of millions in value in 2020 and eventually billions in value.”

Blockchain Capital also made a bold prediction of DeFi hitting $5 billion in 2020. This would also mean more locked ETH which would push its prices up.

Already, the second-largest cryptocurrency by market cap is surging in value. Up 68.09% YTD, ETH is trading at $219, a price level last seen in September.

As we reported, Lucas Campbell of DeFi rate also talked about a trillion-dollar case for Ethereum with DeFi creating “a new paradigm for global finance” with one common theme Eth.

“A trustless economy requires trillions in economic bandwidth. And that’s the trillion-dollar case for ETH,” summarized Mythos Capital founder Ryan Sean Adams.

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Author: AnTy

Bakkt Bitcoin Options Trading Slumps In Last 10 Days With Zero Activity

Trading activity in the Bakkt BTC option market seems to have been at a standstill in the past 10 days as no transactions have been recorded. The exchange’s option trading based on Bitcoin future prices dropped significantly despite a strong start in the first two weeks of 2020.

Bakkt’s business model was quite promising given the cutting edge as physical trade of Bitcoin for settlements within its ecosystem. This has however, yet to yield the speculated level of activity especially in trading Bitcoin futures and options. As it stands, around 63% of the transactions within this network are BTC backed.

Earlier in Jan. 2020, Bakkt’s trading volumes in futures and options were on an uptrend with the former hitting a high of $40.8 million during the first week. The BTC futures were more actively traded than the options and are currently at $20 million as of yesterday; Bitcoin Options traded on the other hand have been at the zero-mark for the past 10 days;

Bakkt’s 1,500% Spike in Physical Bitcoins Delivered

This BTC oriented exchange saw the number of physical coins delivered to them increase by over 1500% over the course of January. Some analysts attributed the spike in volume to Bitcoin’s speculative nature which in turn correlates with the amount of activity in crypto exchanges. The leading digital currency has been on an uptrend to hit the $9,000 mark; this may have contributed to Bakkt’s physical BTC spike.

In addition, interest on unsettled future contracts grew by 14% to stand at $6.17 million. The exchange plans to roll out an alternative to settle BTC transactions through cash; they hope to edge out peers like CME who already have this convenience within their ecosystem. Stakeholders are also optimistic that the Bakkt BTC derivative volumes will pick up as we approach the May 2020 halving.

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Author: Lujan Odera