Market
There was a good alt rally over the weekend after BTC reached its all-time high ($44,700) last week. Several altcoins, including SOL and AVAX, had very good rallies and INJ reached new highs!
There are many reasons why the market is performing well overall, but the most representative ones are the BTC spot ETF issue, falling inflation expectations, and expectations that the Federal Reserve will cut interest rates faster than expected.
Yesterday around 10 am Asian time, BTC flushed. Largest liquidation since November 15th. Many long positions were liquidated due to the unexpected and sudden movement. But I still think we are in an upward trend and I would say not to have too much fear with this move. In crypto markets, sharp declines of 20-30% occur frequently during upward trends and are a very common phenomenon.
It’s hard to be sure yet whether around 40k is the end of this decline. It would be safer for new entrants to derivatives to check the structure a little more before entering. If we lower the price once more, we expect the level shown on the chart to be the last drop. As always, this flush has no effect on spot buyers.
BTC has completed a move of 80% of my expected value, but has not reached the final target price. I still think people’s expectations of the ETF movement are not over and I am expecting BTC 47-48k.
If BTC continues to move sideways, we are considering the possibility that funds will be diverted to altcoins. Several altcoins are already showing such movement, and some good news is ahead. Check it out and refer to it for trading.
News
Important news events this week include CPI and FOMC. I expect interest rates to remain unchanged at the Fed’s rate decision on Thursday and I don’t expect any major surprises.
Greekslive data was used. Thank you.
🌍 Timeline of big events (12/11-12/17):
📌 This week is a big macro week with a number of important central banks, including the Fed, announcing interest rate decisions, with most of the forecasted data now supporting no rate hike, with all major asset classes now adjusting their pricing for the impending end of the rate hike cycle, and cryptocurrencies continuing to see inflows. On the crypto front, CoinShares is nearing the end of BUSD support, as a generation of important stablecoins comes to an end, and there is a strong mood for traditional finance to take over crypto.
12/11 Monday *
🎤 Multiple U.S. Presidential Candidates to Attend Forum Hosted by Coinbase Crypto Advocacy Organization
12/12 Tuesday **
💼 US CPI for November
🎯 South African regulator receives 128 crypto license applications, plans to review 36 of them on December 12
Wednesday 12/13 *
🎤 Next Hearing in FTX Bankruptcy Case Set for December 13th
12/14 Thursday ***
💼 Fed interest rate decision
💼Bank of England interest rate decision
💼 Eurozone ECB rate decision
💼 US initial jobless claims for the week
💼 US retail sales data for November
Friday 12/15 *
🎯Coin will stop supporting BUSD on December 15
📌 Keep a close eye on the market movements before and after the relevant events and adopt an investment strategy accordingly. Good luck with your investment!
Weekly Narratives and Catalysts
- $SNX
has recently turned its inflation to zero, with a buyback & burn mechanism to be implemented soon. It also has other strong upcoming catalysts, such as the Andromeda Upgrade in December, a chain expansion to Base, and the full v3 rollout, and currently, nearly 70% of all of its supply is staked, heavily favoring the demand side.
- $INJ
Volan Mainnet Upgrade, the largest in Injective history, is expected to happen soon.
- $FXS
halving will happen on December 20th, with additional upcoming catalysts such as Fraxchain launch in January, featuring $frxETH as its native gas token, and BAMM, an innovative oracle-free lending mechanism.
Starknet V0.12.3 Mainnet happens on December 11th. Currently, the only protocols in the Starknet ecosystem with tokens are $IMX and $RBX, which might serve as a proxy to speculate on the upcoming $STRK airdrop.
$193M worth of $APT, representing 9% of the circulating supply, will be unlocked on December 11th, mostly to team members and investors.
As the Ordinals censoring movement grows stronger by the conservative side of the Bitcoin community, the SRC20 standard might start to be adopted as these inscriptions can’t be as easily censored. This effectively puts $STAMP and $KEVIN as a good hedge to BRC20s.
- $MATIC
public demo of its upcoming ZK product happens on December 14th.
Eigenlayer will reopen restaking deposits on December 18th with support to 6 different LSTs, as it increases the global cap to 500k $ETH. The highly anticipated Eigenlayer token is expected to be airdropped to depositors.
- $FLUX
FluxCore Beta, a major update for decentralized computing infrastructure , takes place on December 15th.
Material from An Ape’s Prologue was used. Thank you.
Volatility
BTC is experiencing continued volatility compression after a steep rise towards 30k and there is no significant trending change in volatility. As mentioned in previous market updates, spot-vol correlations continue to decline. I think options strategies are not very affected by volatility and call/put spreads as a simple directional strategy are still good. If your strategy is to sell rumors and buy news, you can use a calendar strategy. (Reference: https://x.com/Gravity5ucks/status/1733118785303740786)
The biggest issue in the market right now is probably the spot ETF approval date in January. Expected dates are between January 5th and January 10th. The chances of approval are very high, but we cannot be 100% sure. Although the IV is lower today, there are still market expectations for the ETF’s January IV. I expect January IV to be higher going forward than it is now. There are many events this week, but I think there is a possibility that BTC Vol will fall a little lower if there is no new news.
Yesterday’s flush event led to an increase in put option trading volume in short-term expiring options. Since BTC IV rose quickly by about 4 points, some traders may have made big profits from put options.
As previously mentioned on Twitter, as BTC prices rise, traders are starting to take interest in put options. Yesterday’s flush reversed the skew for the first time, with call prices lower and put prices higher.
1/ As I said in the 12-06 update, we must now also take CME data seriously. CME currently has the highest OI in the entire crypto market. It is true that it contributed greatly to the rise of BTC. CME OI is still high but has decreased slightly. It could mean they are reluctant to hold a position. Continuing to see if they are rolling to maintain positions will be important data in the market.
2/ Before the CPI release yesterday, I said that disinflation is likely to continue because inflation continues to trend downward. In actual published numbers, the core remains sticky and the headline MoM was higher than expected. The data seems to show that there is room for the CPI to rise further, but I don’t think it’s a level of concern yet. I think there is a possibility that the Federal Reserve will dismiss the market’s expectations of a quick interest rate cut at the FOMC.
3/ There is $3.1T OpEx this Friday. OpEx typically has the highest OI at quarterly expirations and is often highest in December, the last month of the year. OpEx can sometimes, but not always, change ongoing trends. Data: @t1alpha
December is usually a time of reduced liquidity. This is the month when many TradFi friends go on vacation. It may also be helpful to take time to think about how it will affect the crypto market.
4/ Between ETF approval and delay Current market expectations are for approval in January. However, if it is not approved in January and there is a delay, there will be a decline that reverses the rise so far in response to those expectations. Betrayal of expectations. However, even if there is a delay as a result, I think there is room for the trend to continue for a little longer because the good news has not disappeared. Either way, I like both. If the January delay is close to the truth, I think there is a high possibility that CME will adjust its position, so seeing the data will increase the accuracy of the interpretation of the factuality. Alternatively, if approved in January, I don’t think December’s year-end will be a less liquid market for Crypto.
Just my little thoughts. Don’t be too trusting.
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