Research Summary
The report by Ouroboros Capital provides an analysis of the current state of the cryptocurrency market, focusing on global liquidity, Bitcoin (BTC), Ethereum (ETH), and altcoins. It also discusses the positioning of traditional finance (TradFi) in BTC and ETH, the state of BTC options, and the behavior of miners and stablecoin flows.
Key Takeaways
Global Liquidity and Crypto Market
- Increasing Global Liquidity: The report notes that global liquidity continues to rise, which is supportive of the current upward trend in cryptocurrency prices. This trend is expected to continue as long as global liquidity keeps increasing.
- High Risk-On Season: The cryptocurrency market is entering a high risk-on season, characterized by more aggressive rotations into smaller alt L1s and meme coins within those chains. Despite this, the report advises caution when chasing the rally.
Bitcoin and Ethereum Analysis
- Bitcoin’s Uptrend: Bitcoin is expected to continue its uptrend, supported by the increasing global liquidity. However, the report notes the presence of both buyers and sellers, with rising flows into exchanges indicating BTC being sold.
- Ethereum’s Heavy Trade: Despite the alt season, Ethereum continues to trade heavily, indicating how consensus ETH is at the moment. The recent bid appears to be spot driven.
Traditional Finance Positioning
- Heavy TradFi Positioning in BTC and ETH: Traditional finance positioning in both Bitcoin and Ethereum continues to be heavy, with elevated CME OI and basis.
Bitcoin Options and Stablecoin Flows
- Expensive BTC Options: Bitcoin options continue to be expensive, with no strong bias in skew. The skew has been rising, indicating more puts being bought than calls, but it’s still at the mid of its range.
- Rising Stablecoin Flows: The report notes a rise in stablecoin flows, indicating that the risk-on in crypto is alive and strong.
Miners’ Behavior
- Miners Selling BTC: Miners continue to sell Bitcoin, according to the report.
Actionable Insights
- Monitor Global Liquidity: Given its impact on cryptocurrency prices, investors should keep a close eye on global liquidity trends.
- Assess Risk-On Season: Investors should assess the risk-on season and its potential impact on their investment strategies, particularly with regard to smaller alt L1s and meme coins.
- Track Bitcoin and Ethereum Trends: Investors should closely track the trends and trading patterns of Bitcoin and Ethereum, given their significant influence on the overall cryptocurrency market.
- Consider TradFi Positioning: The heavy positioning of traditional finance in Bitcoin and Ethereum could have implications for these cryptocurrencies, which investors should consider.
- Examine Stablecoin Flows: The rise in stablecoin flows could indicate a strong risk-on in crypto, which investors should examine for potential impacts on their investment strategies.
