Research Summary
The report from Ouroboros Research provides an in-depth analysis of the current cryptocurrency market, focusing on Bitcoin and Ethereum. It highlights key market trends, including liquidity, open interest, funding, and miner selling activities. The report also discusses the impact of traditional finance on Bitcoin and Ethereum, the speculation of Bitcoin upside through options, and the deployment of stablecoins.
Key Takeaways
Market Caution Amidst Positive Liquidity
- Increasing Liquidity: The report notes that both the stablecoin market cap and global liquidity continue to rise, suggesting a longer-term bullish view on crypto. However, the total crypto market cap is at post-LUNA highs, warranting caution.
- Miners Selling Bitcoin: Despite the positive liquidity, Bitcoin miners are selling more, which could potentially impact the market.
Return of Speculation and Alt Casino
- Speculation in Bitcoin: The report observes an increase in Bitcoin open interest (OI) with a positive uptick in funding, indicating that upside speculation is creeping back into Bitcoin.
- Alt Casino: The report also notes that the altcoin open interest is approaching prior highs, suggesting a resurgence of the “alt casino”.
Traditional Finance’s Influence on Bitcoin and Ethereum
- Traditional Finance Bidding Bitcoin: The report highlights that traditional finance continues to bid Bitcoin, with BTC CME basis at the top end of its range.
- Traditional Finance Bidding Ethereum: Despite the price action of ETHBTC not suggesting so, traditional finance is also bidding Ethereum, with ETH CME OI and basis at a year-to-date high.
Options Speculation and Liquidation Clusters
- Bitcoin Upside Speculation: The report notes that speculation of Bitcoin upside through options continues to be rife, with Calls significantly more expensive than Puts.
- Liquidation Clusters: The report identifies liquidation clusters around 27k on the downside and 37800 on the upside for Bitcoin, and most of Ethereum’s liquidation clusters to the upside.
Stablecoin Deployment and Market Cap
- Stablecoin Deployment: The report observes a high level of deployment from stablecoins to risk, with the stablecoin market cap as a percentage of the total crypto market cap at the lows, which tends to herald retracements.
- Stablecoin Market Cap: Despite the high deployment, the stablecoin market cap continues to tick up.
Actionable Insights
- Monitor Liquidity Trends: Given the increasing liquidity and stablecoin market cap, it’s crucial to keep an eye on these trends as they could impact the overall crypto market.
- Assess Miner Selling Activities: The selling activities of Bitcoin miners could potentially affect the market, hence it’s important to monitor these activities.
- Understand Traditional Finance’s Influence: Traditional finance’s bidding activities on Bitcoin and Ethereum could have significant implications on these cryptocurrencies, warranting further analysis.
- Consider Options Speculation and Liquidation Clusters: The speculation of Bitcoin upside through options and the identified liquidation clusters could provide valuable insights for market positioning.
- Track Stablecoin Deployment: The high level of stablecoin deployment to risk could herald retracements, making it important to track these deployments.
