Services
How it works
Company
Insights
Connect
Get Started

RESEARCH

Research / gamma-pin
GAMMA PIN
main news

BEQUANT Crypto&Coffee

Risk on sentiment was abound, with S&P 500 hitting a new record high. Interestingly, the apparent risk on theme was matched by an aggressive wall of buying gold which saw the yellow metal trade it is highest level in two-week. When looked alongside the recent pull back in yields, it screams rotation into deflation, as opposed to inflation. 

In the context of the recent high by stocks, it is worth pointing out that the recent Bank of America's January Global Fund Manager Survey revealed that 36% of surveyed participants said that "long bitcoin" was the most crowded trade, followed by "long tech." "Long tech" and "Long US tech" had been the most crowded trades since the spring of 2020.

Said otherwise, crowded trade or not, money has to get allocated somewhere and given the recent trend of opportunistically allocating to Bitcoin, especially by holders of gold, the bias remains northbound for Bitcoin. Alas, this does not mean straight line, exponential rallies and profit taking, price discovery and so on, are a natural phenomenon of aggressive price squeeze. Volatility is your friend and crypto natives do not shy away from it. The said vol has continued to decline from its peak earlier in the month and with put buying evident over the recent sessions, the bullish camp was displaying signs of mental fatigue. 

However, the fact that at the time of writing call option selling accounted for over 40% of the activity on Deribit suggests that market participants are expecting range bound price action. This alone should put some of the aforementioned fears to rest, but if not, there is also a large OI at $52k strike due to expire this month. Expect the risk on sentiment to filter through to Bitcoin and broader market, as despite the recent protection buying (puts), there is a huge open interest at 52k strike. Until then, there is some negative gamma to contend with at $34k and then at $35k. The ambitious $52k strike related squeeze will require spot to trade somewhat higher.

In terms of news flow and the big news is that BlackRock, the world's largest asset manager with $7.81 trillion under management, appears to have granted at least two of its funds the ability to invest in bitcoin futures. Prospectus documents filed with the U.S. Securities and Exchange Commission Wednesday indicate that BlackRock Global Allocation Fund Inc. and BlackRock Funds V are at least eyeing bitcoin. They both include the world's oldest cryptocurrency on their lists of derivative products cleared for use.

Another interesting development is that the number of tether transactions on the Tron blockchain have passed Ethereum's count for three consecutive weeks as fees on the number two blockchain remain high. As per CoinDesk, “lately, given the increased cost of Ethereum transactions, it would be logical to use Tron,” said Tether CTO Paolo Ardoino, noting the newer blockchain also has “good adoption across crypto exchanges” and is “extremely cheap compared to Ethereum.”

Denis Vinokourov
This is not a bluff
ETH, The Merge, Fed, Bond volatility Read more
Martha Reyes
Precautionary measures
ETH, The Merge, BELLATRIX upgradeRead more
Martha Reyes
BEQUANT’s robust approach to Risk Management as a driver for sustainable growth in a volatile market
Risk Management, Cross- Margin, Leverage, BEQUANTRead more
Administrator
news card
A Summer Lull
Administrator
news card
Why these key market indicators are indispensable (and how to use them to your advantage)
Administrator
news card
Hard Squeeze
Administrator
news card
Seesawing
Administrator