OTC Weekly Trading Insights (04/10/2024)

Last week, $FARM, the native token of Harvest Finance's yield farming protocol, increased by 93.9% due to a significant volume increase. Harvest Finance is a yield farming protocol that allocates user funds across multiple defi platforms to generate returns. Bella Protocol ($BEL) has entered into a strategic partnership with Manta Network ($MANTA) recently. Bella Protocol is dedicated to exploring new partnerships in liquidity farming to increase yield opportunities for its community, drive the development of infrastructure layers and DeFi applications, and pave the way for a more expansive, efficient, and equitable DeFi ecosystem across diverse landscapes. Nervos ($CKB) gained 98.1% last week. This surge is closely related to the application of RGB++, an extension protocol based on the success of RGB (Really Good Bitcoin). RGB++ addresses scalability issues by utilizing Bitcoin's Lightning Network sidechain and Layer 2 capabilities. Ethena ($ENA) is a synthetic dollar protocol based on Ethereum that will provide a crypto-native solution for money that is not dependent on traditional banking infrastructure. Its recent announcement to increase the stake reward sparked market demand, and its price rose 61.3% in 7 days.   Overall Market The above chart shows the BTC price movement last month. BTC found trendline support from the lower red line and broke through the upper resistant trendline on Monday. However, the BTC price failed to stand above the wedge's upper bound and is currently trading around $69k. On Tuesday, the fake breakout shook off some leveraged long positions, liquidating over $15 million in long positions on the exchange in the last 24 hours.  Because the BTC halving day is less than two weeks away, our desk anticipates that the market will be more volatile in the next several weeks. If the $69k support level fails to hold, the next support level is around $66,500 by the lower trendline, followed by the $60k strong demand zone as marked in red. The above chart shows the ETH price movement last month. On the other hand, ETH successfully broke above the downward trendline and turned it into support.  Following Vitalik's last-minute appearance at Hong Kong's largest Web3 event, ETH experienced strong demand in the Asia session and continued its momentum in the Europe session. ETH price increased by more than 8% in 12 hours before retracing in the US session. The bearish sentiment stemmed from the diminishing prospect of SEC ETF approval in May, and the sell-off on the BTC spreadover added to the downward pressure. If ETH can stay above the downward trendline, which is now acting as support, the next major supply zone will be around $4,100. Options Market The above table shows the 25-delta skewness for BTC and ETH options. The BTC reward halving date is approaching, with an estimated date of April 19, 2024. Following Monday's fake breakout, the 25-delta skew is slightly below zero on the front end. We observed a similar skew on ETH options with the same duration. In the intermedia tenor, the skew of BTC options remains above zero for both 30-day and 60-day expiry. With the same expiries, the skews of ETH options are closer to the 0 level. Options traders are more risk averse on BTC near-term options, despite maintaining a positive outlook after the halving. They are less bullish on ETH in the medium term, especially since investors and traders have given up hope of an SEC ETF approval in May. With the halving event only two weeks away, our desk expects implied volatility to rise and short-term options to have higher premiums. It is critical to manage risks around this long-awaited event.  Macro at a glance  Last Thursday (24-04-04) US initial jobless claims rose to 221k last week, exceeding the estimated 213k and the previous week's 212k. The initial jobless claims are a proxy measure of the US labor market, and they have been reported in the 210k range over the last nine weeks. Several FOMC members made hawkish remarks about the fewer rate cuts in 2024. Risk assets fell sharply, while the US dollar and US Treasury yields rose. Last Friday (24-04-05) US nonfarm payrolls increased by 303k in March, far exceeding the expected 212k and last month's 270k. The strong nonfarm payrolls indicate that the US labour market is stronger than expected. The US unemployment rate fell back to 3.8% in March, having risen from 3.7% in January to 3.9% in February. The data provided clear support for the hawkish remarks made by several FOMC members yesterday.  The Canadian unemployment rate increased from 5.8% in February to 6.1% in March, exceeding the expected 5.9%.  This Monday (24-04-08) Israel announced on Sunday that it had withdrawn additional soldiers from southern Gaza. The easing of geopolitical tensions caused a retracement in gold and oil prices. Risk assets rose in the US session. BTC unexpectedly soared above $71k with increased implied volatility in options. ETH outperformed BTC following Vitalik's last-minute appearance at Hong Kong's largest Web3 event to give a technical talk on blockchain technology.  Later this week, we have US CPI data on Wednesday Bank of Canada interest rate decision on Wednesday FOMC meeting minutes on Wednesday European Central Bank interest rate decision on Thursday Convert Portal Volume Change The above table shows the volume change on our Convert Portal by zone.  This week, our desk noticed that trading volume increased significantly in Fan Token and Payments zones. Over the last seven days, the Fan Token Zone has experienced the greatest percentage increase in volume. AS Roma Fan Token ($ASR) is the main contributor to such tremendous growth. The Payments zone saw a 37.4% increase in trading volume on Convert. Pundi X ($PUNDIX) saw the highest increase in trading demand among all tokens in the Payments zone. The DeFi zone also experienced a 1.1% volume increase. Harvest Finance ($FARM) and Bella Protocol ($BEL) had the most significant volume increase in this zone and contributed the most to the growth. 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!