• This week, the top 5 tokens of interest are all from the DeFi zone, with UMA and TRB focusing on Oracle space and RUNE and FRONT focusing on DeFi infrastructure space.

  • The price of Tellor Tributes ($TRB) soared over $100 the week before, from $43 to $145 in six days, while the upward momentum has faded away and it is trading above the $110 level. 

  • After the huge pump on Tellor Tributes, our desk observed the strong capital inflow into another Oracle project UMA ($UMA). UMA saw a significant volume uptick last week, and the price soared over 50% from $3.10 to the highest $4.63 before giving up part of the gain and now trading at $3.67.

  • BENQI ($QI) is a decentralised non-custodial liquidity market protocol, built on Avalanche. The protocol enables users to effortlessly lend, borrow, and earn interest with their digital assets. Last week, the market saw strong demand for BENQI in the US session, but the price retraced back in Asia hours.

  • ThorChain ($RUNE) is a decentralised liquidity network with an interoperable blockchain that allows cross-chain token swaps in a non-custodial manner. Our desk saw strong demand for cross-chain projects in the last few weeks.

Overall Market

  • The above chart shows the BTC price movement from the beginning of March.

  • As previously discussed, the 350-Day Moving Average serves as a strong support level, as does the $60k/61k range. After the price rebounded to $65k from its recent low of $56.4k, our desk noticed that strong demand in the $60k/61k range had returned. 

  • With a positive inflow from US BTC spot ETFs last week, BTC price consolidated above the $61k level and traded within the descending triangle formed by the downward trendline and the $61k support level. 

  • On Wednesday, US CPI readings were in line with market expectations, easing market concerns that the Federal Reserve would not cut interest rates this year. The market went into full risk-on mode, and the broader crypto market rose during the US session. Bitcoin soared 7.5% on the bullish sentiment, trading above $66,000 before the Asia market open. The breakout of the downward channel, as shown in the chart above, suggests that Bitcoin's bullish momentum has returned. As long as the Bitcoin price remains above the downward channel, it may lead to the next leg up in the coming months.

  • The macroeconomic outlook also supports the bullish trend. As discussed in our Macro at a Glance section, the Bank of England and the European Central Bank have paved the way for rate cuts this year, which could occur as early as next month. In addition, beginning June 1, the Federal Reserve will reduce its quantitative tightening program on Treasury runoff from $60 billion to $25 billion per month. 

  • The improved liquidity on the global market would fuel the Bitcoin bullish trend and drive the BTC price to a new all-time high.

Options Market

  • The above chart shows the 25-delta skew of BTC options with different tenors.

  • After the US CPI data was released on Wednesday, our desk noticed an upward trend in the 25-delta skew of BTC options of various tenors. The aggressive move of short-term options bypassing the zero level suggests that market sentiment has shifted from bearish (25-delta skew below -5) to neutral (25-delta skew above 0). 

  • The 25-delta skew for long-term options (180-day expiry) increased and is now greater than 5. It suggests that institutional investors remain bullish on the BTC price in the long run, as the 25-delta call premium is significantly higher than the 25-delta put premium. 

  • If the skew of BTC options remains above the 0 line across all tenors in the coming week, it will indicate that the bearish trend has ended and that the BTC price may soon begin to rise again.

Macro at a glance 

  • Last Thursday (24-05-09)

    • The Bank of England maintained its interest rate at 5.25%, unchanged. Headline inflation in the UK has since fallen, and the Bank of England expects it to slow to around its 2% target in April, owing primarily to falling energy prices. Governor Andrew Bailey stated that there may be more reductions than investors anticipate. 

    • US initial jobless claims increased from 209k the week before to 231k last week, the highest level in eight months, signalling a cooling US labour market and fuelling expectations for rate cuts later this year.

  • On Monday (24-05-13)

    • In April, the CPI in Germany increased by 0.5% month on month, an uptick from the 0.4% growth seen in March, while annualised CPI growth rate remained at 2.2% from March. The CPI data in Germany indicated that the Eurozone is far better positioned than the US to control inflation, and the cooling inflation data supports the European Central Bank's anticipated rate cut decision, which could come as early as next month.

  • On Tuesday (24-05-14)

    • The US PPI is expected to grow by 0.5% month on month in April, higher than the estimated 0.3% and -0.1% (revised) in March. Core PPI is also expected to grow at a 0.5% rate, up from an estimated 0.2% and -0.1% (revisioned) in March. The hot PPI numbers were primarily due to a lower revision of March data. 

    • Federal Reserve Chair Powell stated that he expects inflation to continue to fall but is less confident in the disinflation outlook than he had previously been. The market did not interpret his comment as a potential rate hike, with US 10-year Treasury note yields falling to 4.451% afterward.

  • On Wednesday (24-05-15)

    • April's US CPI data met expectations. The annualised CPI growth rate was 3.4%, down from 3.5% in March, while the core CPI growth rate was 3.6%, a decrease from 3.8% in March. The market sees signs of encouragement by the ease of March's unexpected inflation rebound, with all three US equity indices closing near all-time highs. Bitcoin rose more than 7% in the US session, trading above the $66,000 level. The US dollar index closed lower at 104.283. 

Convert Portal Volume Change

  • The above table shows the volume change on our Convert Portal by zone. 

  • This week, Convert's trading volume saw a large increase in the Fan Token zone and Liquid Staking zone.

  • The two tokens with the highest trading demand last week were AS Roma Fan Token ($ASR) and Manchester City Fan Token ($CITY), which contributed significantly to the Fan Token zone's 102.5% volume increase.

  • The Liquid Staking zone experienced a 31.2% increase in trading volume on Convert last week. Benqi ($QI) is the primary contributor to the volume growth.

  • During the same period, volume in the Infrastructure zone dropped by 7.8%. The decrease is largely due to faded trading demand for Wormhole ($W).


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