Research Summary
The report from Ouroboros Capital provides an in-depth analysis of the cryptocurrency market, focusing on Bitcoin (BTC) and Ethereum (ETH). It discusses the impact of recent events such as the Binance/DOJ headline, the selling trend among BTC miners, and the changes in the stablecoin market cap. The report also examines the positioning and flows of these cryptocurrencies, providing insights into their potential future movements.
Key Takeaways
Impact of Binance/DOJ Headline on Market Positioning
- Market Reaction to Binance/DOJ News: The report suggests that the market was not pre-positioned for the Binance/DOJ news, which is seen as bullish. Despite the news, BTC price was close to its year-to-date highs and had a retracement of less than 10%. The heavy positioning in BTC and ETH has yet to resolve, leading to a preference to stay flat.
Bitcoin Miners Turning Sellers
- Miners’ Selling Trend: The report notes that BTC miners have started selling, a trend that sometimes marks near-term tops. This selling trend adds to the caution in the market, as it has been observed to coincide with heavy retracements in the past.
Stablecoin Market Cap Increase
- Stablecoin Market Cap Growth: The stablecoin market cap has increased by $3 billion in the past week. This growth in liquidity is seen as a positive sign for the market, supporting longer-term bullishness into 2024.
Altcoin Market Cap at Highs
- Altcoin Market Cap Positioning: The altcoin market cap is at post-LUNA/pre-FTX highs, suggesting it may be due for a retracement. The total crypto market cap appears to be stalling as it hits the top of its one-year channel.
Ethereum’s Positioning and Price Action
- Ethereum’s Market Positioning: The report suggests that ETH positioning might be too consensus given its lackluster price action. ETH is approaching the upper end of its range as markets position for the ETH ETF. The ETH options IV-RV is now negative at -0.98, indicating that options are expensive due to upside speculation.
Actionable Insights
- Monitor BTC Miners’ Selling Trend: Given the potential impact of BTC miners’ selling trend on market retracements, it would be prudent to keep a close eye on this trend for any significant changes.
- Assess Stablecoin Market Cap Growth: The increase in the stablecoin market cap could indicate a positive liquidity trend. Monitoring this growth could provide insights into the overall health of the crypto market.
- Watch Altcoin Market Cap Positioning: With the altcoin market cap at highs, it may be due for a retracement. Keeping track of this could help anticipate potential market movements.
- Consider Ethereum’s Market Positioning: Given the lackluster price action of ETH, it might be worth reassessing its market positioning. The negative ETH options IV-RV could also indicate expensive options due to upside speculation.
