Key Takeaways

• BTC and ETH finish the week largely where they started
• BNB continued to stabilise, while SOL showed weakness
• EMEA continues to be a heavy seller, with balanced flows across other regions
• No real change in futures basis, while in options, the front end has come in noticeably for skew and atm vols
• With no new FUD or macro events, the market remains alert, but largely paused till the new year

Looking back

This past holiday week saw a mostly muted market in terms of price action, with only a few instances of heavy movement to note. Both BTC and ETH closed the week within spitting distance of where they opened, from $16,750 to around $16,830 for BTC, and ETH moving slightly more from $1,187 to $1,215. Mid-week the market saw two sell offs, one where BTC dropped about $400 dollars to $16,350, and another $300 dollar drop to $16,560, but both declines quickly reversed.

Outside of the majors BNB, a recent market laggard due to the FUD surrounding Binance, showed some signs of stabilising, as it also finished the week unchanged. Despite the relatively volatile price movements in BNB the previous week, it never got close to its recent low of about $220, bottoming out around $237, showing signs that the lack of news surrounding Binance is causing no further cause for alarm. SOL showed some real weakness though, dropping around 8% over the last week, from $12.50 to $11.41.

Despite our client flow data looking fairly even overall, there are some notable standouts this past week. EMEA continues to be a very heavy seller, even as other regions have been quite balanced. In a similar vein, OTC brokers and banks were very good sellers, and while crypto exchanges skewed towards buying, all other clients had good two way flow. Across coins our clients were better sellers of  SOL, XRP, and BNB, while DOGE was one of the only coins with notable buying.

Any changes in the futures basis have been negligible, with no real catalysts for movement in sight. The BTC 1 and 3 month basis has been fairly stable around -1%, while the ETH bais for both 1 and 3 month hovered around -1.5%.

In options the mid curve and back end of the surface has stayed pretty firm in all respects, while the front end has come in noticeably for both skew and atm vols. In BTC 1 week vols have dropped from 45 to around 37, with 1 week in ETH experiencing an even more severe crush from 62 to 52 vols. Front end 25 delta skew has seen a similar move, with BTC and ETH skew dropping about 13 points to 8% and 5 points to 10% respectively, even as 3 month skew holds steady at 17% for both major coins. Overall it looks like the options market is predicting a quiet end to the holiday season, and to 2022 overall.

Looking ahead

With no new FUD on the rise, and no macro events on the horizon, it looks as though crypto will be finishing the year on a relatively muted note. Between crypto specific fireworks and the larger global macro environment, there was certainly no shortage of action in the markets this year, with the market uncertainty of 2022 looking to extend into 2023 . In the short term traders will likely be keeping an eye on twitter in case of further headline risk from Binance or some other major player, while trying to interpret what the lack of recent price action paired to the decline in outflows from Binance means for prices going into the new year.  Longer term the key macro driver continues to be inflation, and the constantly evolving geopolitical  situation.

Regardless of what’s in store, B2C2 wishes all the readers of Cryptobits and our clients the best of luck, and good tidings for the new year.

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All data sourced from our real time systems supporting global 24/7 crypto liquidity provision

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About B2C2

More than just a liquidity provider, B2C2 is a digital asset pioneer building the ecosystem of the future.

The firm has unlocked institutional access to crypto by providing reliable liquidity across market conditions. B2C2’s success is built on crypto native technology and continuous product innovation, making it the partner of choice for diverse institutions globally.

Founded in 2015 and majority owned by Japanese financial group, SBI, B2C2 Ltd is headquartered in the UK, with offices in the US and Japan.

B2C2 Ltd is registered in England and Wales under company number 07995888 with its registered office at 86-90 Paul Street, London, EC2A 4NE.  B2C2 Ltd is the parent company of the B2C2 group of companies. Products may be provided by different members of the B2C2 group of companies, depending on the jurisdiction of the client and the regulatory status of the product and/or B2C2 group member. B2C2 is a registered trademark.