This week, Solana (SOL) stormed back with a strong performance, while the BTC price continues to hop between $30k and $31k.
Compound (COMP) continues its outstanding performance in the borrowing/lending sector. After a 53% pump last week, COMP rallied another 8.4% in the last 7 days. Other competitors, like Aave (AAVE) and Maker (MKR), see some profit-taking after the big rally last week.
Polygon (MATIC) also had a 6.3% gain in the last 7 days, with the news that the world's largest chain of convenience stores, 7-Eleven, announced the launch of Slurpee NFTs on the Polygon chain.
On the other hand, some Layer 1 coins were underperforming. Fantom (FTM) was down over 14%, and Algorand (ALGO) was down 12.5%. The market action on the FTM price might be due to the multichain exploit confirmed last Friday.
Convert Portal Volume Breakdown
This week, our OTC desk observed some interesting trades on small-cap cryptocurrencies while the BTC price continued its sideways movement in the $30k - $31k range.
Crypto-to-stablecoin weight was down from 38.22% to 36.26%, while stablecoin-to-crypto weight improved from 22.58% to 24.57%. Both changes suggest that investors have deployed more capital into crypto assets. As mentioned last week, the trade flows suggested that investors were actively allocating their crypto asset portfolios instead of cashing out and staying sidelined.
Options Market
As mentioned last week, our OTC desk closely monitored the 25-delta skewness on BTC options. The BTC price experienced some rapid movements on Monday, rallied from $30,270 to above $31,000, then fell back to $30,270 within four hours. The needle-shaped pattern on June 10 was caused by that movement. Yet, the market sentiment recovered pretty fast, and the 25-delta skewness moved higher in all expiries listed. Right now, the options market suggests that investors and traders are paying higher premiums on calls while BTC prices struggle to break the price range between $30k and $31k.
At the same time, the implied volatility of BTC options with a 30-day expiration is suppressed below 38%. Although the BTC price has been trading sideways for about 3 weeks, 38% implied volatility on BTC options is not normal. The longer it gets suppressed, the bigger the move after the direction is made. Combined with the observation we have about the option skewness, the upside movement might have a bigger chance.
Macro at a glance
Last Wednesday (2023-07-05), FOMC minutes for June showed that policymakers decided to pause the rate hike in the June meeting to have a better assessment of the economy’s performance toward the Fed’s goals of maximum employment and price stability. Also, it showed that almost all officials agreed to further tightening at a slower pace. The probability of a 25bps rate hike at the July meeting is 93%.
Last Thursday (2023-07-06), the initial jobless claim was 248k, slightly higher than the estimated 245k and the previous month’s 236k. It showed the labour market might soften a bit. ISM non-manufacturing PMI was at 53.9, better than the estimated 51.0, and improving from last month’s 50.3. It suggests that the US economy is in an expansion phase.
Last Friday (2023-07-07), US nonfarm payroll dropped from last month’s 306k to 209k in June, while the unemployment rate is at 3.6% as estimated, slightly better than the previous month’s 3.7%. The robust labour market shows its resilience after the aggressive rate hikes by the Fed in the last ten months.
On Wednesday (2023-07-12), the US released its CPI reading for June as 3.0% YoY, a 1% improvement from last month’s 4.0%. However, the core CPI reading is still at 4.8%, a 0.5% improvement from last month’s 5.3%. Also, the Bank of Canada decided to raise 25bps interest rate to 5%, with a forecast to reach a 2% inflation target by mid-2025 rather than 2024 as forecasted before. All risk assets, including equities and crypto assets, were pumped after the CPI reading but gave up most of their gains by the US market close. BTC price challenged 31k intraday and got rejected at $30,980, fell to $30,210, then recovered to $30,350 before the Asia markets opened.
Why trade OTC?
Binance offers our clients various ways to access OTC trading, including chat communication channels and the Binance Spot Block Trading platform for manual price quotations, or automated price quotations via our Binance Convert and the Binance Convert OTC API. For manual price quotations, you may visit our Spot Block Trading Platform, where you can RFQ (request-for-quote) and trade directly with our OTC trading team via a live chat, or reach out to us via our email at liquidity@binance.com for our trading desk to get in touch with you and get started.
Alternatively, OTC trades may also be automatically quoted on Binance Convert and via API, offering users a quick and simple way to execute trades across 60,000+ pairs with one simple click. Binance Convert supports over 350 tokens listed on the exchange including fiat pairs. Begin trading from as little as 1 USD. To start, simply navigate to the Binance Convert, select the coins you wish to trade, preview and confirm the quote with settlement reflecting almost instantly in your wallet balance. For details and access to Binance Convert OTC API, please refer to our Convert Endpoints and reach out to us at liquidity@binance.com if you have any questions or require assistance.
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