OTC Weekly Trading Insights (05/08/2024)

Render's ($RNDR) price has risen 44.1% in the last seven days, owing to excitement about a new launchpad called the Long Dragon on its ecosystem. The Long Dragon launchpad will thoroughly vet projects, including purchasing a portion of their funding round.  Optimism ($OP), a layer-2 Ethereum scaling solution, appears on our weekly coins of interest list twice in a row. Following the announcement of the a16z purchase last week, the market is seeing strong demand for this token. Cosmos Hub ($ATOM) is a constantly expanding ecosystem of interoperable and sovereign blockchain apps and services designed for a decentralised future. The recent strong demand for cross-chain projects has boosted market demand for ATOM. Chainlink ($LINK), a blockchain oracle data provider, has recently experienced high market demand, coinciding with the Real World Asset (RWA) innovation. On May 7, Chainlink Labs announced that RD Technologies had integrated Chainlink CCIP and Proof of Reserve to power its Hong Kong dollar stablecoin. Overall Market The above chart shows the BTC price movement in the last two months. As we discussed last week, the 350 moving average on the 8H chart above provides strong support in the $56k/57k range. The strong rebound sent Bitcoin's price up more than 15% in five days, from $56,550 to $65,500.  However, the BTC price faced strong selling pressure above $65k, retested the downward trend line several times, and made a lower low in the lower timeframe. The downward trend line is currently acting as support, but market momentum is trending downward. If the Bitcoin (BTC) price falls back into the downward channel, it may retest the 60k strong demand zone and even the moving average at $58k. In the last two Bitcoin halvings, in 2016 and 2020, the BTC price traded sideways for 2 to 3 months before surpassing the pre-halving high. If the pattern holds, the Bitcoin (BTC) price will most likely fluctuate between $56k and $73k in the next few months. Options Market The above table shows the at-the-money implied volatility of BTC and ETH options. Following the halving in April and the FOMC meeting last Wednesday, the IVs of BTC and ETH options fell from their previous highs. The IV of BTC options with a short tenor (7-day expiry) has fallen below 50% in less than a month, having peaked at 83% on April 13. In contrast to BTC options, IVs of ETH options retraced significantly less. The IV for ETH options with a 7-day expiry is now 56%, while the IV for a 60-day expiry is 59.34%. The high IVs on ETH options could be attributed to the SEC's uncertainty regarding the ETH spot ETF approval process. Based on our observations, the implied volatility gaps between BTC and ETH options with the same tenor have widened in recent weeks. Such observations support our view that the BTC price will trade sideways this summer, while altcoins will be more volatile. It could signal the start of the long-awaited altcoin season.   Macro at a glance  Last Thursday (24-05-02) US initial jobless claims were 208k, the same as the previous week. After the FOMC meeting yesterday, Federal Reserve Chair Powell stated that a significant increase in the US unemployment rate is required for the Fed to consider cutting interest rates. Analysts predict the Fed will postpone its first rate cut from June to September, citing persistent inflation and a tight labour market. Last Friday (24-05-03) The US nonfarm payroll increased by 175k in April, much lower than the expected 238k and the previous month's 315k.  The US unemployment rate increased to 3.9% in April from 3.8% in March.  Average hourly earnings growth slowed from 4.1% in March to 3.9% year on year in April.  The data suggests that the US labour market is cooling, but it is probably too early to expect the Federal Reserve to begin cutting interest rates before September, given that the labour market remains relatively tight.  On Monday (24-05-06) The Reserve Bank of Australia maintained its benchmark rate at 4.35%. RBA Governor Michele Bullock said she hoped no interest rate hikes were required but did not rule out the possibility if inflation remained stubbornly high. Later this week, we have Bank of England interest rate decision this Thursday. Canada’s April unemployment rate this Friday Convert Portal Volume Change The above table shows the volume change on our Convert Portal by zone.  This week, Convert's trading volume increased, with POW, Infrastructure, and AI zones seeing double-digit volume growth. Tellor Tributes ($TRB) and DigiByte ($DGB) have made the most significant contributions to the POW zone's 13.1% volume increase over the last week. The Infrastructure zone experienced a 13.1% increase in trading volume on Convert. Tellor Tributes ($TRB) and Render ($RNDR) are the primary contributors to volume growth. During the same period, volume in the AI zone increased by 13.0%. This double-digit growth is largely due to increased trading demand for Worldcoin ($WLD).   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!