Crypto Market

BTC and ETH Market Insight

There were significant sell-offs and price fluctuations in the recent market, with a $2B worth of Bitcoin transfer to different exchanges by short-term holders. Despite facing resistance, Bitcoin still has an opportunity to achieve new highs, with a potential target of $48,000. $BTC increased by 60% this quarter, while $ETH has lagged behind with only a 35% gain. Over the last 30 days, $AVAX has doubled and surpassed $40 in price, and its market cap was approaching $15B. This surge is attributed to its strategic focus on real-world assets and GameFi.

Options Market

The abrupt pullback on Monday found its footing fairly fast  above 40k level and the market had recovered and stablised around 42k level. However, downside protection remained in demand and the expectation of an elevated volatility from Jan 24 expiry and onward showed no sign of moderation. Front-end IVs were under pressure as we approached the Christmas season with skew being priced around neutrality. Mid-dated and long-dated IVs continued to trade at a decent premium against RVs. The volatility spread between ETH and BTC widened further, with BTC volatility decreasing while ETH’s remained firm. Buy Jan 24/Dec 29 calendar spread could be a viable way to have cheaper exposure into the ETF approval.

Altcoins and Blockchain News

• According to documents filed by FTX with the U.S. Bankruptcy Court of Delaware, the revised FTX reorganization plan will provide compensation to users based on the value of the token when FTX filed for bankruptcy on November 11, 2022.
• Worldcoin released World ID 2.0, integrating it with Minecraft, Reddit, Telegram, Shopify and Mercado Libre.
• Chain game guild Yield Guild Games announced a partnership with Ubisoft chain game Champions Tactics, a PvP turn-based game.
• Frax Finance tweeted that it will issue assets in the Frax Finance ecosystem on Osmosis, Mantle, Linea, Kujira, Manta Network and Scroll through Axelar Network, including FRAX, frxETH, etc.
• KuCoin pays $22M to settle crypto lawsuit, agrees to exit New York market.
• Decentralized exchange Trader Joe announces the launch of DEX Merchant Moe, specially built for the Layer2 network Mantle, and launches a new token MOE.
• According to Coindesk, Sotheby’s first auction of the inscribed BitcoinShrooms (three pixelated images) fetched approximately $450,000, five times its highest estimate.
• Binance Launchpool announced the launch of its 40th project, Fusionist Token ACE.
• Crypto venture capital firm C1 Fund plans to buy privately held shares of Animoca Brands and other companies for $500 million.

Macro

The major benchmarks closed the week with solid gains: the DJIA added +2.9%, the S&P 500 added +2.5%, and the NASDAQ +2.8%. The CBOE Volatility Index (VIX) fell to its lowest in the post-COVID time. A key message delivered by the Federal’s Reserve meeting was that rate hikes are likely over, and rate cuts could begin in 2024. With inflation cooling and yields moving lower, markets responded with great confidence.