- Last week, cryptoassets continued to consolidate on account of
continuing worries about the US economy, renewed net outflows from US spot Bitcoin and Ethereum ETFs as
well as some idiosyncratic negative news flow around Ethereum.
- Our in-house “Cryptoasset Sentiment Index” has
reversed from neutral levels and has turned bearish again.
- It is quite likely that September will see continuing
consolidation until Q4 as September has historically been the worst month for Bitcoin’s
performance from a pure seasonality perspective.
Chart of the Week
Performance
Last week, cryptoassets continued to consolidate on account of continuing worries
about the US economy, renewed net outflows from US spot Bitcoin and Ethereum ETFs as well as some
idiosyncratic negative news flow around Ethereum.
Leading indicators of US unemployment such as the Conference Board’s difference
between “jobs hard to get” and “jobs plentiful” have continued to worsen signalling
an increasing probability of a US recession.
In traditional finance, major retail stocks of discount stores such as Dollar General
plunged significantly after reporting a dismal financial condition of US lower-income consumers.
What is more is that Nvidia’s stock price declined by more than -5% despite
sales and earnings consensus beats which signals increasing investor expectations of peak revenues of the
3rd biggest global company by market cap.
This negative mood spilled over into cryptoassets as both US spot Bitcoin and
Ethereum ETFs experienced negative net outflows on aggregate last week.
This was also exacerbated by an idiosyncratic negative news flow around Ethereum.
On-chain data revealed last week that Ethereum founder Vitalik Buterin distributed an additional 1k ETH.
Vitalik’s on-chain Ethereum holdings have declined by around -5k ETH in August, according to data
provided by Arkham. These distributions are following recent sales by the Ethereum Foundation which damped
market mood even further.
Apart from this, we saw significant futures long liquidations as bitcoin declined
from 64k USD to sub-60k USD again and Ethereum declined from around 2700 USD to sub-2500 USD. More
specifically, long bitcoin futures liquidations increased to 29.3 mn USD and long Ethereum futures
liquidations also increased to 29.2 mn USD according to data provided by Glassnode - the highest levels
since the capitulation event in early August.
As a result, overall crypto sentiment has turned bearish again. It is quite likely
that September will see continuing consolidation until Q4 as September has historically been the worst month
for Bitcoin’s performance from a pure seasonality perspective
(Chart-of-the-Week).
On a positive note, we think that the crypto bearish sentiment makes further
downside risks less likely in the short term and, thus, we also do not expect that the market will revisit
the lows from early August.
Cross Asset Performance (Week-to-Date)
Source: Bloomberg, Coinmarketcap; performances in USD exept Bund Future
Top 10 Cryptoasset Performance (Week-to-Date)
Source: Coinmarketcap
In general, among the top 10 crypto assets, TRON, XRP, Toncoin were the relative
outperformers.
Overall, altcoin outperformance vis-à-vis Bitcoin reversed to the downside
again, with 35% of our tracked altcoins managing to outperform Bitcoin on a weekly basis, consistent with an
underperformance of Ethereum relative to Bitcoin.
Sentiment
Our in-house “Cryptoasset Sentiment
Index” has reversed from neutral levels and has turned bearish again.
At the moment, only 3 out of 15 indicators are above their short-term trend.
Last week, there were significant reversals to the downside in the BTC funding rate
and BTC 3-months basis rate.
The Crypto Fear & Greed Index currently signals a “Fear” level
of sentiment as of this morning.
Performance dispersion among cryptoassets still remains
at very low levels. This means that altcoins are still very much correlated with the performance of Bitcoin.
Altcoin outperformance vis-à-vis Bitcoin
reversed last week, with 35% of our tracked altcoins outperforming Bitcoin on a weekly basis. This was also
consistent with an underperformance of Ethereum vis-à-vis Bitcoin last week.
In general, increasing (decreasing) altcoin outperformance tends to be a sign of
increasing (decreasing) risk appetite within cryptoasset markets and the latest altcoin underperformance
signals decreasing risk appetite at the moment.
Meanwhile, sentiment in traditional financial markets as measured by our in-house measure of
Cross Asset Risk Appetite (CARA) still remains at neutral levels
after having recovered sharply from the very low levels observed in early August.
Fund Flows
Fund flows into global crypto ETPs reversed significantly last week.
Global crypto ETPs saw around -265.0 mn USD in net
outflows across all types of cryptoassets which is a significant reversal from the positive +688.5 mn USD in
net inflows observed the week prior.
Global Bitcoin ETPs saw net
outflows of
-287.2 mn USD last week, of which -268.3 mn USD in net outflows were related to US
spot Bitcoin ETFs alone. In contrast, Hong Kong Bitcoin
ETFs still managed to attract +14.1 mn USD in net inflows.
Outflows from the ETC
Group Physical Bitcoin ETP (BTCE) decelerated further last week with net outflows
equivalent to -7.5 mn USD and the ETC
Group Core Bitcoin ETP (BTC1) even saw minor net inflows of +0.04 mn
USD.
The Grayscale Bitcoin Trust (GBTC) continued to see net outflows, with around -119.2
mn USD last week. However, the ARK 21Shares Bitcoin ETF experienced even higher net outflows with around
-220.9 mn USD last week according to data provided by Bloomberg.
Meanwhile,
global Ethereum ETPs continued
to see net
outflows last week of -5.2 mn USD, albeit at decelerating pace. US Ethereum spot
ETFs saw around -12.6 mn USD in net outflows in aggregate. However, this was
mostly related to continuing outflows from the Grayscale Ethereum Trust (ETHE) again which experienced -27.8
mn USD in net outflows last week.
Hong Kong Ethereum ETFs saw minor net outflows last week (-1.9 mn USD).
The ETC
Group Physical Ethereum ETP (ZETH) defied negative market developments and showed
minor net inflows (+0.4 mn USD) while the ETC
Group Ethereum Staking ETP (ET32) even managed to attract +2.9 mn USD
in net inflows last week.
Altcoin ETPs ex Ethereum also experienced positive net
flows of around +12.3 mn USD last week.
Besides, Thematic & basket crypto ETPs also saw
continued net inflows with around +15.1 mn USD last week. The ETC
Group MSCI Digital Assets Select 20 ETP (DA20) saw neither in- nor
outflows last week (+/- 0 mn USD).
Meanwhile, global crypto hedge funds reduced their
market exposure somewhat last week after reaching a 3-months high. Global crypto hedge funds still remain
slightly underweight to Bitcoin. The 20-days rolling beta of global crypto hedge funds’ performance to
Bitcoin decreased to around 0.85 per yesterday’s close.
On-Chain Data
In general, major Bitcoin on-chain metrics have recently reversed to the downside
again.
Bitcoin spot intraday net buying volumes have significantly reversed to the downside
again after having touched a 3-months high recently. Over the past week, net buying volumes across BTC spot
exchanges amounted to around -1,048 mn USD which is the lowest level since early August.
Last week’s selling pressure appears to have emanated to a large extent from
net outflows from US spot Bitcoin ETFs.
Meanwhile, BTC whales have also transferred bitcoins to exchanges more recently which
tends to pressure prices on exchanges. More specifically, BTC whales have transferred around 5.5k BTC to
exchanges. Whales are defined as network entities that control at least 1,000 BTC. As a result, on-exchange
balances have declined over the past week.
Nonetheless, it is also worth highlighting overall BTC net exchange transfers
continued to be negative implying a decrease in available supply on exchanges which tends to be a positive
development.
Moreover, bitcoin’s illiquid supply reached a new all-time high of almost 74%
of circulating supply according to data provided by Glassnode signalling that the Halving-induced supply
shock is actually intensifying. This should provide an increasing tailwind for Bitcoin and other
cryptoassets over the coming months.
Besides, there were no distributions by large holders such as the Mt Gox trustee or
the US government last week.
As far as Ethereum is concerned, there was some idiosyncratic negative news flow
around Ethereum. On-chain data revealed last week that Ethereum founder Vitalik Buterin distributed an
additional 1k ETH. Vitalik’s on-chain Ethereum holdings have declined by around -5k ETH in August,
according to data provided by Arkham. These distributions are following recent sales by the Ethereum
Foundation which damped market mood even further.
Overall ETH exchange balances also increased somewhat from its multi-year lows last
week which has signalled a temporary increase in ETH selling pressure.
Futures, Options & Perpetuals
Last week’s developments in derivatives were dominated by significant futures
long liquidations and reductions in open interest.
We saw significant futures long liquidations as bitcoin declined from 64k USD to
sub-60k USD again and Ethereum declined from around 2700 USD to sub-2500 USD.
More specifically, long bitcoin futures liquidations increased to 29.3 mn USD and
long Ethereum futures liquidations also increased to 29.2 mn USD according to data provided by Glassnode -
the highest levels since the capitulation event in early August.
In consequence, both perpetual funding rates and the basis rates declines
significantly. The BTC perpetual funding rate even turned negative again.
It is worth mentioning that out of the past 7 days, 3 days have seen negative
perpetual funding rates in BTC, implying a significant build-up in short interest lately. We think that this
could create a set-up for a significant short squeeze down the road.
When the funding rate is positive (negative), long (short) positions periodically pay
short (long) positions. A negative funding rate tends to be a sign of bearish sentiment in perpetual futures
markets.
The 3-months annualized BTC futures basis rate declined to a 4-months low to around
7.1% p.a.
Besides, BTC option open interest declined significantly on account of the
end-of-month option expiries. However, the put-call open interest ratio also continued to decline suggesting
a net increase in call demand relative puts which tends to be a bullish sign.
Nonetheless, the 1-month 25-delta skews for BTC increased significantly and turned
positive suggesting increasing relative demand for put options.
Meanwhile, BTC option implied volatilities continued to move sideways. At the time of
writing, implied volatilities of 1-month ATM Bitcoin options are currently at around 51.8% p.a.
Bottom Line
- Last week, cryptoassets continued to consolidate on account of
continuing worries about the US economy, renewed net outflows from US spot Bitcoin and Ethereum ETFs as
well as some idiosyncratic negative news flow around Ethereum.
- Our in-house “Cryptoasset Sentiment Index” has
reversed from neutral levels and has turned bearish again.
- It is quite likely that September will see continuing
consolidation until Q4 as September has historically been the worst month for Bitcoin’s
performance from a pure seasonality perspective.
Appendix
Bitcoin Price vs Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, ETC Group
Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, ETC Group; *multiplied by (-1)
Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, ETC Group
TradFi Sentiment Indicators
Source: Bloomberg, NilssonHedge, ETC Group
Crypto Sentiment Indicators
Source: Coinmarketcap, alternative.me, ETC Group
Crypto Options' Sentiment Indicators
Source: Glassnode, ETC Group
Crypto Futures & Perpetuals' Sentiment Indicators
Source: Glassnode, ETC Group; *Cumulative daily absolute change in BTC OI multiplied by sign of BTC price change
Crypto On-Chain Indicators
Source: Glassnode, ETC Group
Bitcoin vs Crypto Fear & Greed Index
Source: alternative.me, Coinmarketcap, ETC Group
Bitcoin vs Global Crypto ETP Fund Flows
Source: Bloomberg, ETC Group; Only ETPs & Grayscale Trusts
Global Crypto ETP Fund Flows
Source: Bloomberg, ETC Group; Only ETPs & Grayscale Trusts
US Spot Bitcoin ETF Fund Flows
Source: Bloomberg, ETC Group; data subject to change
US Spot Bitcoin ETFs: Flows since launch
Source: Bloomberg, Fund flows since traiding launch on 11/01/24; data subject to change
US Spot Bitcoin ETFs: 5-days flow
Source: Bloomber; data subject to change
US Bitcoin ETFs: Net Fund Flows since 11th Jan mn USD
Source: Bloomberg, ETC Group; data as of 02-09-2024
Bitcoin vs Crypto Hedge Fund Beta
Source: Coinmarketcap, Bloomberg, NilssonHedge, ETC Group
Altseason Index
Source: Coinmarketcap, ETC Group
Bitcoin vs Crypto Dispersion Index
Source: Coinmarketcap, ETC Group; Dispersion = (1 - Average Altcoin Correlation with Bitcoin)
BTC Net Exchange Volume by Size
Source: Glassnode, ETC Group
AVVISO IMPORTANTE:
Questo articolo non costituisce consulenza finanziaria, né rappresenta un'offerta o un invito all'acquisto di prodotti finanziari. Questo articolo è solo a scopo informativo generale, e non vi è alcuna assicurazione o garanzia esplicita o implicita sulla correttezza, accuratezza, completezza o correttezza di questo articolo o delle opinioni in esso contenute. Si consiglia di non fare affidamento sulla correttezza, accuratezza, completezza o correttezza di questo articolo o delle opinioni in esso contenute. Si prega di notare che questo articolo non costituisce né consulenza finanziaria né un'offerta o un invito all'acquisizione di prodotti finanziari o criptovalute.
PRIMA DI INVESTIRE IN CRYPTO ETP, GLI INVESTITORI POTENZIALI DOVREBBERO CONSIDERARE QUANTO SEGUE:
Gli investitori potenziali dovrebbero cercare consulenza indipendente e prendere in considerazione le informazioni rilevanti contenute nel prospetto base e nelle condizioni finali degli ETP, in particolare i fattori di rischio menzionati in essi. Il capitale investito è a rischio, e le perdite fino all'importo investito sono possibili. Il prodotto è soggetto a un rischio controparte intrinseco nei confronti dell'emittente degli ETP e può subire perdite fino a una perdita totale se l'emittente non adempie ai suoi obblighi contrattuali. La struttura legale degli ETP è equivalente a quella di un titolo di debito. Gli ETP sono trattati come altri strumenti finanziari.
