Q9 Markets: The Long and Short of It

  • Crypto down/flat after longest run in 9 months
  • Number of short term indicators signal a cooling
  • But 73% of financial professionals think their business should adopt blockchain and crypto
  1. Exchange inflows. In a reversal of the trend we noted last week, there has been a pickup in exchange inflows. The number of Bitcoin held in exchange wallets is rising, departing from the recent trend of outflows and a signal of renewed investor intention to sell. Over the past week more than 29,000 BTC have been moved to exchanges. Investors typically move coins from their wallets to exchanges when they plan to sell.
  2. Funding rates are still relatively low. This is most likely because fewer people are keeping their coins in exchange to use them as leverage. This means most of the rally has been driven by demand in spot rather than from leveraged speculators. Relatively low funding rates in Bitcoin’s futures market indicates less exuberance among investors.
  3. Declining internet search. Google Trends indicates that searches for the phrase “Bitcoin” are at a 9-months low and retail interest in this bull market has yet to break through the late 2017 peak. However, Searches for “Cardano” are surging strongly as ADA approaches $3.
  4. Whale accumulation falling. Whales, or large investors with an ability to make or break market trends, who accumulated coins after the mid-May price crash, have begun running down their inventory. The supply held by entities with a balance of 1,000 BTC to 10,000 BTC has declined by nearly 75,000 BTC over the past three weeks, diverging from the rising price.
  5. Options markets indicate caution. The options markets skew and open interest change for short tenor BTC options are more concentrated on puts than calls indicating some caution. Typically we might see more euphoria and leverage to the upside following the recent move.
Source: Deloitte Annual Global Blockchain Survey
Source: Deloitte Annual Global Blockchain Survey
Source: Chainalysis
Source: Chainalysis
  • Bitcoin in Afghanistan: In a recent investigative report, CNBC looked into the use of cryptocurrency in Afghanistan. The country primarily operates on a cash economy, but some Afghans are adopting cryptocurrency; in fact, in the last year, the country ascended from being among the lowest in grassroots crypto adoption last year to number 20 on Chainalysis’ Adoption Index this year.
  • Citigroup is gearing up to sell CME Bitcoin futures. The bank is said to be fielding a surge in client demand for cryptocurrency exposure as bitcoin again mounts a climb toward $50,000.
  • Coinbase has struck a deal with Mitsubishi UFJ Financial Group, betting the Japanese bank’s vast customer base (34m domestic customers) will help it secure a foothold in one of the world’s centers for digital asset trading.
  • PayPal launches crypto buying and selling in the UK. The roll-out, which marks the first international expansion of PayPal’s cryptocurrencies services outside of the United States, could inspire further mainstream adoption of the new asset class.
  • Wells Fargo on Thursday registered a private bitcoin fund with U.S. regulators, becoming the latest mega-bank with an indirect crypto investment vehicle for its wealthiest clients.
  • Walmart is the latest Fortune 500 Company hiring a cryptocurrency expert. The position is responsible for developing the retailer’s “digital currency strategy and product roadmap” as well as identifying “crypto-related investment and partnerships,” according to the job posting
  • There was good news for Doge fanatics this week as the Dogecoin Foundation resurfaced after several years of total media silence. According to an announcement on Tuesday, the foundation stated it was reestablishing itself in a bid to support the fiery-eyed Dogecoin (DOGE) community.
  • Police in Victoria have seized nearly $8.5M in cryptocurrency, a record seizure for Australian law enforcement, as part of an investigation into online drug trafficking.
  • BTC/USD was unchanged (+0.5%) while ETH/USD slipped -2.6%. Bitcoins dominance continues to hover below 44% as the total market cap ex-BTC stayed above 1.1tn
  • EOS/USD declined -9.7% and SUSHI/USD was the key laggard among large cap DeFi names with a -17.1% decline
  • Annualised volatility dropped to 67% for BTC and 61% for ETH this week
  • Two-way activity on client pad slightly better to buy (1.1x buyers vs sellers)
  • Rotation out of BTC to ETH and EOS
  • Mild buying activity in LINK

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Q9 Capital

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Buy, sell, and store digital assets with ease. Invest with the trust of an established financial services provider with 40 years of group history.

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