As we navigate through an ever-evolving cryptocurrency market, it’s crucial to stay informed about the latest trends and developments. AT DV Chain, we’re dedicated to providing our users with insights that keep them ahead, which is why we started our new weekly market commentary series. See below for this week’s edition:
General Market Recap:
BTC ETF Launch on 1/11/24:
- Traders were heavily positioned prior to the launch. We saw all-time highs in BTC CME open interest on the launch (chart source: VeloData) which was unwound aggressively in the following days.
- Despite the enthusiasm of the CME traders, offshore perp positioning was relatively mild going into the ETF launch and relatively light again now.
- DV saw internal retail flows peaking on ETF launch day and then come down in the following days but have stabilized over the last week.
Grayscale GBTC Outflows:
- Outflows have been slowing down; last Monday’s outflow was $624 million vs this Monday’s $275 million — could be a good sign for BTC price if selling pressure continues to ease on this front.
- Large ETH call overwriter is back — it appears that a large market player is again actively overwriting ETH calls, likely the same entity we saw doing this late 2023
- Coupled with Celsius distributions (more on that below), this has been putting supply pressure on ETH and resulting in ETH underperforming relative to Bitcoin over the past week.
Upcoming Catalysts / Trade Ideas:
JUP First Airdrop (1/31/24):
- JUP pre-launch futures trading at about $0.7, implying a launch at about $7 billion FDV.
- This means the Solana ecosystem expected to receive about 700 million in stimulus, which should have a positive impact on Solana metrics and attention.
- DVOTC will list JUP as soon as there is sufficient liquidity on hedging venues. Will be available for eligible counterparties only.
- Other notable airdrops that may announce dates soon are: Tensor, Zeta, Parcl, Drift, Kamino, Marginfi.
Celsius Distribution (On or around 1/31/24):
- About $2 billion in crypto to be distributed back to users via Coinbase.
- Celsius wallets moving coins to Coinbase and Paxos wallets, including a significant ETH transaction for 443,961 ETH (almost $1b USD) last week
- Given the timing and the heavy price action on ETH/BTC, we think these coins are likely the coins that will be distributed to Celsius customers, estimated to begin this week. This could have somewhat of a stimulatory effect on alts as a sidelined group of retail receives coins back into a much healthier market than when Celsius declared bankruptcy over a year ago. We think that Alt/BTC + Alt/ETH longs could be a way to play this.
Manta Withdrawals (3/26/24):
- 900 million+ TVL currently trapped in Manta; airdrop stakers can’t withdraw without taking a haircut.
- With Blast and Eigenlayer launching around a similar time, we expect them to siphon TVL, activity, and mindshare from Manta.
- Linear unlocks coinciding with withdrawals may result in supply pressure and underperformance for Manta.
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