Crypto Market

BTC and ETH Market Insight

Jerome Powell expected to set the stage for September rate cut. He is likely to signal a 25-basis point rate cut in September and advise against expecting a continuous series of rate cuts at future meetings. Bitcoin is nearly 20% lower than its ATH, while U.S. stocks and gold are at or near record levels. There is bearish sentiment due to Mt. Gox distributions and government sales. A negative perpetual funding rate and a surge in Bitcoin open interest may suggest the possibility of a short squeeze. Solana ETFs have faced a significant setback as the regulator remains uncertain about classifying SOL as a security.

Options Market

The market was moving sideways in a tight range before Powell’s indication on rate cut in September at Jackson Hole. BTC and ETH both rallied to three-week highs on rate-cut optimism. The implied volatility drifted marginally lower and more upside structures such as call spread, call calendar spread printed on the move. The skew is broadly neutral or favouring calls  for BTC across the curve whereas the front-end skew stayed bid for ETH put. The ETH/BTC volatility spread remained wide as ETH still lagged BTC on the rebound. The interest in positioning in Nov-8 expiry (US-election event) kept growing - a stronger skew in OTM calls is observed.

Altcoins and Blockchain News

• According to BBC, Pavel Durov, the CEO of Telegram, was arrested by French police, TON plummeted below 5.5 USDT in a short period, with a 24-hour decline of 17.93%.

• According to Etherscan data, the supply of the stablecoin USDe issued by Ethena Labs dropped below 3 billion tokens.

• Fetch.ai plans to allocate $10 million annually to fund AI platforms and establish an innovation lab in San Francisco.

• CKB has released the public lightning network Fiber Network light paper, and Fiber will go live for testing next week.
  Coinbase has enabled support for sending and receiving EURC on the Solana network.

• Galxe has launched the Alpha mainnet of its Layer 1 blockchain, Gravity.

• Babylon: The first phase‘s staking limit of 1,000 BTC has been reached.

Marco

The decline in US yields is continuing, and we believe there is significant room for further decrease as the cycle of rate cuts begins. If the 10-year yield remains below 3.80% for an extended period, it could lead to a drop to 3.20%. The concept of peak rates has been a fundamental support for our optimistic outlook and appears poised to gain momentum.