OTC Weekly Trading Insights (04/24/2024)

Bonk ($BONK) is a dog-themed token built on the Solana blockchain. Its price increased by more than 80% last week in response to a broader rally among meme coins and a proposal for a massive treasury burn totaling 280 billion tokens. BONK DAO intends to burn 278,393,137,215 BONK from its Treasury, accounting for 100% of the BONK generated by BONK DAO under its revenue-sharing agreement with BONKBot since its launch in late 2023. The proposal has been well received by the Bonk community, which sees the burn as a positive step toward stabilising the coin's market and encouraging growth. As the proposal awaits approval, the anticipation has fueled a buying frenzy, driving Bonk's price higher. Jito ($JTO), the Jito Network's native cryptocurrency, has once again joined the mega-uptrend. The Jito ($JTO) price increased by an incredible 27.2% last week. Jito Network contributes significantly to the Solana ecosystem through its JitoSOL liquid staking pool and a variety of MEV products. BRC-20 token Sats ($1000SATS) experienced a large-scale pullback prior to the BTC halving and saw strong demand afterward. Sats is the second-largest BRC-20 token by market capitalization and one of the most popular meme coins. The recent surge is more closely related to the overall strong performance of the Memecoin space.   Overall Market The above chart shows the BTC price movement in the last 30 days. Our desk believes the $60k - $61k range is in high demand, as previously stated. When the bitcoin price fell below $60k on April 17 due to rising geopolitical tensions between Israel and Iran, strong demand quickly pushed it back above $61k. The demand zone was tested again when a rumour circulated on social media about an explosion in Iran. This could be Israel's response to Iran's drone and missile attack two days ago. Concerns about a potential war between the two countries led to a sudden sell-off in Bitcoin. The long shadow needle also shows that the strong demand zone remains effective. On April 20, Bitcoin completed its fourth halving, reducing the block reward from 6.5 BTC to 3.25 BTC for miners who validate transactions on the Bitcoin network.  The BTC price has recovered from the sell-off caused by geopolitical tensions, and it has now turned the downward trendline into a support line. Our team believes that the BTC price will trade sideways as many miners will sell their holdings because they cannot stay in the business after the halving. ETF demand will continue to play a significant role in the coming months, with new Bitcoin ETFs listed on the Hong Kong Stock Exchange. Options Market The above chart shows the at-the-money implied volatility for BTC options. As shown above, the implied volatility for BTC options across various tenors decreased following the halving. The IV for the 7-day expiry option has dropped over 10% from more than 70% to 60% in the last three days. IVs for longer-term options have also gradually declined from the 70% level. As the geopolitical conflicts in the Middle East subside, our desk expects the IVs of BTC options to remain at this level in the coming weeks before gradually returning to the 50% range in the coming months. The table above displays the at-the-money implied volatility (IV) for BTC and ETH options of varying tenors. Following the BTC halving, the IVs of BTC options fell, while the IVs of ETH options remained around 70%.  Following the halving, the difference between ETH and BTC options of the same tenor widened. The current difference between the IVs of ETH and BTC 7-day options is approximately 6.8%. Options traders can capitalise on such IV differences by selling ETH straddle options and buying BTC straddle options with the same notional.  Furthermore, the higher IVs on ETH options indicate that the options market believes ETH will be more volatile than BTC in the next several months, which could be a signal of the start of the long-awaited altcoin season. Macro at a glance  Last Wednesday (24-04-17) The Eurozone's CPI growth rate slowed further in March. In March, the annualised CPI fell from 2.6% in February to 2.4%, while the core CPI fell from 3.1% in February to 2.9%. The cooling of inflation in the Eurozone provides a solid foundation for the ECB to cut interest rates by 25 basis points in June.  Last Thursday (24-04-18) US initial jobless claims remain low; they were reported at 212k last week, the same as the week before. The strong labour market and sticky inflation in the United States have altered market expectations for the Fed's rate cuts this year. To combat persistent inflation, several FOMC members proposed keeping the current interest rate unchanged for an extended period of time. On Tuesday (24-04-23) S&P Global US manufacturing PMI is expected to be 49.9 in April, down from last month's 51.9 and the forecasted 52.0. S&P Global Services PMI is expected to be 50.9 in April, down from the forecasted 52.0 and 51.7 last month. Both PMI figures suggest that the US economy will slow in April.  Australia's CPI growth rate has outpaced expectations. The annualised CPI fell from 4.1% in Q4 2023 to 3.6% in Q1 2024, which exceeded the expected 3.4%. However, inflation at 3.6% exceeds the Reserve Bank of Australia's long-term target rate of 2%. Australia's high inflation has delayed the RBA's expected rate cut. Later this week, we have US Q1 GDP growth rate on Thursday Bank of Japan’s interest rate decision on Friday local time US PCE price index for March will be released on Friday Convert Portal Volume Change The above table shows the volume change on our Convert Portal by zone.  This week, our desk noticed a drop in trading volume across all zones due to the BTC halving and low trading demand. Over the last seven days, trading volume in the Liquid Staking Zone has decreased by 25.25 percent. Jito ($JTO) is the most popular token in this zone. The Meme zone saw a 27.05% decrease in trading volume on Convert. Bonk ($BONK) and Sats ($1000SATS) experienced the greatest increase in trading demand among all tokens in the Meme Zone. During the same period, volume in the Solana zone decreased by 36.47%. Bonk ($BONK) and Jito ($JTO) are the most trending tokens in this zone. Why trade OTC?   Binance offers our clients various ways to access OTC trading, including chat communication channels and the Binance OTC platform (https://www.binance.com/en/otc) for manual price quotations, Algo Orders, or automated price quotations via Binance Convert and Block Trade platform (https://www.binance.com/en/convert) and the Binance Convert OTC API.  Email: [email protected] for more information. Join our Telegram (https://t.me/BinanceOTC) to stay up to date with the markets!