LTP Research 中文

LTP Research
Table of contents
● Summary for October 2023
● Market comments
● News
● November fluctuation day
● Appendix
October 2023 Summary
The cryptocurrency market showed a clear "risk appetite" trend in October. The circulating supply of the major stablecoin increased significantly during this period, reaching $842 million. Bitcoin, in particular, has shown surprising resilience to broader market corrections, with price growth exceeding 30%. In addition, the volatility of major cryptocurrencies has also increased significantly, with Bitcoin’s volatility increasing by 70% compared to the previous month.

September Digital Asset Review
LTP Research

Table of contents
● September 2023 Summary
● Market comments
● News
● October Volatility Day
● Appendix

September 2023 Summary
In September, major assets retreated as the U.S. dollar index soared to yearly highs in 2023. The S&P 500 fell 5.3%, the Nasdaq fell 6.4%, and gold fell 4.7%. However, Bitcoin recorded a 4% gain. The decorrelation between Bitcoin’s performance and these major assets deserves continued attention. Generally speaking, a stronger U.S. dollar leads to lower market risk appetite, causing stocks and risk assets, including cryptocurrencies, to underperform.

1. The Fed paused raising interest rates in September, and long-term Treasury yields soared
On September 20, the Federal Reserve announced that it would maintain interest rates at a target range of 5.25% to 5.5%, in line with market expectations. At a press conference after the meeting, Fed Chairman Jerome Powell emphasized that the committee is closely watching current economic data to determine whether they have achieved their intended monetary policy stance. Powell also noted that inflation is receding, in addition to volatile food and energy prices. However, rising energy costs remain a concern, especially given the recent surge in gasoline prices to 2023 highs.

August 2023 Summary

In early August, as the U.S. dollar strengthened and risk appetite declined, major asset classes experienced volatility. The S&P 500 Index fell 5.1% from its high point, and the Nasdaq Composite Index fell by as much as 7.6%. In addition, the maximum retracement of gold is 4.4% and the maximum retracement of Bitcoin is 11%. Then at the end of the month, the S&P 500, Nasdaq Composite, and gold showed signs of recovery, while Bitcoin remained weak, signaling weakening risk appetite for cryptocurrencies.

Annual inflation data released in August showed the first clear rise after 12 consecutive months of deceleration. Rising energy costs have raised concerns about near-term inflation forecasts. The unemployment rate rose to 3.8% in August (previously 3.5%). Investors remained cautious over concerns that rising unemployment and persistent inflation could lead to stagflation.

Long-term U.S. bond yields surged as inflation concerns grew.

As of August 23, long-term government bonds have exceeded the highest level in 2022, with the 10-year bond yield reaching 4.34%, the 20-year bond yield reaching 4.45%, and the 30-year bond yield reaching 4.64%, indicating that the future may There will be higher interest rates. Markets are anticipating a durable and higher interest rate policy, which could trigger further declines in risk assets if the upcoming U.S. core PCE price index shows rising inflation when it is released on August 31.

Consumer Price Index July 2023: Year-on-year inflation rose for the first time since June 2022, rising from 3% to 3.299%.

The U.S. Consumer Price Index in July 2023 showed that the inflation rate increased year-on-year, from 3% in June 2023 to 3.29%. Inflation rose for the first time after rising for 12 consecutive months. The decline begins in June 2022. Inflation previously peaked at 8.93% in June 2022 before falling steadily over the following 12 months. The rise in inflation comes as long-term Treasury yields have risen since May and are close to their November 2022 peaks, signaling growing investor concerns about near-term inflation and longer-term high interest rate policies. Meanwhile, the unemployment rate remained relatively stable in July at 3.5%.

July 2023 Summary

Cryptocurrency trading volumes generally declined in July. Commercial opportunities on the Chicago Mercantile Exchange (CME) turned slightly net short in July. Additionally, Bitcoin’s annualized volatility fell to a quarterly low in July as trading volume decreased. Bitcoin’s price remained range-bound in July, consistent with its historical seasonal pattern. After Ripple's verdict in the SEC lawsuit in mid-July, some cryptocurrencies saw a significant increase in trading volume due to the $XRP market. The trading volume of mainstream cryptocurrencies fell back in the second half of July, and the market continued to slow down.

Fed raises interest rates

On July 26, 2023, the Federal Reserve raised interest rates by 25 basis points. Although inflation is showing signs of moderation, with YoY falling to 3% in June, Fed Chairman Powell said there is still a long way to go to get inflation back to 2%. On the other hand, the Fed continues to reduce its holdings of Treasury bonds, agency bonds and real estate mortgage-backed securities. After the news was announced, the CME FedWatch tool reflected that the market expected the FOMC to further raise interest rates by 25 basis points in September.

Relative volume and volatility of major cryptocurrencies

The U.S. CPI fell to 3% year-on-year, and the market expected the last interest rate hike in July.

On July 12, 2023, the United States released year-on-year consumer price index (CPI) data, showing 3.0%, lower than the previous 4%. The Federal Reserve's aggressive interest rate hikes will reduce inflation to its lowest level in 2023, with a target of 2%.

The U.S. dollar index fell rapidly after the release of this data. In addition, the Fed funds rate futures contract reflects the market's expectation that there will be a final interest rate hike in July 2023.

Looking ahead, the Federal Open Market Committee (FOMC) meets on July 26, 2023, when Fed Chairman Jerome Powell is expected to provide more information on the Fed's plans for quantitative tightening and adjustments to federal interest rates for the remainder of the year.

2.10 BTCTUSD/BTCUSDT premium - negative premium

BTCUSD/BTCUSDT Premium-Discount(1st June to 15th June)

BTCUSD/BTCUSDT Premium Discount(15th June to 30th June)

The BTCTUSD pair has been trading at a premium compared to the Binance BTCUSDT pair.

Between June 14 and 21, BTCTUSD was at a negative premium relative to BTCUSDT as USDT FUD, TUSDUSDT rose above $1. However, BTCTUSD quickly returned to premium a few days later.

In addition, Binance has also launched a zero-handling fee event for TUSD orders, which will take effect at 00:00:000 (UTC) on June 30.

3. News

By LTP Research

Table of contents:

● Summary of June

● Market comments

○ Macroeconomic Outlook

○ Bitcoin CME futures CFTC commercial institutional positions

○ LTP Bitcoin price model

○ Spot and derivatives trading volume on centralized and decentralized exchanges

○ Bitcoin transaction flow in June

○ Bitcoin Price Review (June Price Drivers)

○ Bitcoin Cash ($BCH) - Biggest gain in June

○ Popular Layer 1 (L1s) and Layer 2 tokens (L2s) performance

○ Performance of popular GameFi/Metaverse and decentralized financial tokens

BTCUSDT (Spot), BTCTUSD (Spot), Cash/Crypto Margined, Perpetual Futures Open Interest, TUSD Circulating Supply, BTCUSDT-BTCTUSD Premium/Discount, Long/Short Liquidations

1. Last week was a very bullish week for Bitcoin. The spot price of Bitcoin on Binance reached $31,432 on June 23, which is the highest level so far this year. This increase stemmed from Blackrock’s submission of an application for a Bitcoin spot ETF on June 16, and the price of Bitcoin subsequently increased by more than 20%.

2. On June 20 and 22, WisdomTree, Invesco and Valkyrie also followed Blackrock’s footsteps and submitted applications for Bitcoin spot ETFs, and the price of Bitcoin rose further during the New York trading session. ETF applications from multiple traditional institutions prove Bitcoin’s growing appeal.