Chart of the Week: In the Mood for Leveraged Bets

• ETH options open interest has reached a new high at around US$8B. Options are a leveraged play on ETH and traders are likely piling up the bets in anticipation of the mainnet merge in September. Last week, the final testnet merge, Goerli, was successfully completed, giving traders an extra confidence boost.

 

 

Fund Flow Tracker

• No significant movements in aggregated exchange balances for both BTC and ETH over the past week.

 

 

 

 

Derivatives Pulse

• Implied vols and skews (puts minus calls) are subdued. 1-week implied vol currently stands at 58.7% (vs. 63.1% a week ago) and 84.8% (vs. 91.9% a week ago) for BTC and ETH, respectively. Put-call ratios remain at low levels.

 

 

 

 

 

 

 

 

 

 

• Perpetual futures funding rates remain mainly in positive territory for both BTC and ETH over the past week.

 

 

 

 

• Asset managers’ net-long position in CME Bitcoin futures continues to crawl up, and leveraged traders’ net-short position keeps on reducing. Other reportables’ (which includes corporate treasuries) net-long position has flipped to net-short.

 

 

• Leveraged traders are typically hedge funds and various types of money managers, including commodity trading advisors and commodity pool operators. The traders may be engaged in managing and conducting proprietary futures trading, and trading on behalf of speculative clients.
• The asset manager category consists of institutional investors, including pension funds, endowments, insurance companies, mutual funds, and those portfolio/investment managers whose clients are predominantly institutional.
• The dealer category consists of participants typically described as the “sell-side” of the market. These include large banks and dealers in securities, swaps, and other derivatives. The other reportable category consists of traders mostly using markets to hedge business risk, and includes amongst others corporate treasuries.

Technically Speaking

• BTC and ETH both have momentum in their sails, reclaiming key levels US$24K and US$2K, respectively. However, the surge has driven ETH into short-term overbought territory based on the 14-day Relative Strength Indicator (RSI), with BTC closing in as well.

 

 

Price Movements

 

 

 

 

News Highlights

• Ethereum’s final testnet merge on Goerli was launched.
• Crypto.com obtains Electronic Financial Transactions Act and Virtual Asset Service Provider registration in South Korea by acquiring PnLink Co., Ltd and OK-BIT Co., Ltd.
• Coinbase’s credit rating gets cut by S&P to BB from BB+.
• BlackRock launches a spot Bitcoin private trust for U.S. institutional clients.

Catalyst Calendar

 

 

 

 

 

 

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Author

Research and Insights Team

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