Majors have remained range bound but BTC did make a fresh, albeit marginal cycle high ($31,525-ish); and both price action and derivatives flow have been revealing. Last Thursday during a quiet Asia afternoon session, BTC took off without warning from $30,500. At the same time, the options market was lifting large clips of front end vol. By mid morning in London, BTC was threatening $31,500 resistance, but it couldn't hold, and once the big June ADP employment number hit the wires (495k jobs vs consensus 228k), the market went into freefall, dropping below $30,000 less than 2 hours later. Despite the volatility on that day, there was little follow through to the downside, NFPs did little to trouble the bulls, and the market has traded sideways since.
ETH has shadowed BTC again for the week, with the cross relatively stable around 0.062. Outside of the majors, SOL is up ~10% on the week, but perhaps the most significant action has been ApeCoin, which dipped to a low of $1.84, as the value of BAYC NFTs continue to crater.
BTC flows over the past week have been 61.9% buying, massively outperforming ETH where we have had 59.3% sell flows. We have had strong buying in SOL (61.4%), DOGE (65.7%), EOS (64.8%) and ADA (63.5%); strong selling in XRP (70.2%) and BNB (62.0%). By client category, funds were evenly split, while every other category displayed a strong bias to buy; by geography, APAC clients were our strongest buyers (69.8%). .
Vol markets have been torn between positioning, with market makers short the back end, and falling realised volatility, with spot again failing to break out to the topside of the recent range. As a result, curves have steepened, with the back holding up for now, and the front coming in. July BTC atm vol is currently at 39%, down from around 44% a week ago, while dec vol is unchanged around 50%.
Futures basis is mixed but in general remains elevated on major exchanges. On the CME, bases for July BTC and ETH are both down a few percentage points to 10-11%; on Binance Sept BTC basis is up 0.5% to 7.5%, while Sept ETH basis is down 0.5% to 4.3%.
For macro traders, tomorrow’s US CPI data for June will be the highlight this week, and crypto bulls will be hoping for better signals of disinflation that we have had recently. The bulls will also have to keep their eyes peeled for more Binance FUD, and any further signals of job market tightness.
All data sourced from our real time systems supporting global 24/7 liquidity provision
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