Crypto grinds lower as markets anticipate a capitulation

​​$BTC 24 Hour High $38,641  / Low $37,516 |   $BTC -1.6% Past 24 hours; -0.7% Past 7 day

Good morning. The crypto markets remained soft ahead of today’s FOMC meeting, and fear reigned over the space again as indicated by the Fear & Greed Index, which dropped to the extreme fear level of 24. The markets seemed to have priced in a 50 bps rate hike, and anything equal to or lower than that rate could trigger a short relief rally in prices. $BTC’s put-call skews continued to hover above zero, indicating stronger put demands on a bearish outlook.

BTC’s monthly closed below the 20M EMA. Historically, a close below this level may lead $BTC to move lower to test the 50M EMA, which is currently just above $26,000. Investors are advised to have some dry powder ready should $BTC make such a move in the next few months. The short-term support is $37,200, but don’t expect this level to offer too much strength. In the shorter term, $BTC may grind lower towards $35,000. However, the macrostructure remains intact, and we anticipate the bottom of the triangle to hold. But, if it fails to hold, $26,000 will become our local bottom target. Negative funding rates have disappeared, implying that speculative longs are returning and buying the most recent dip. This sets us up for higher volatility as the open interest has increased. 

$ETH is holding up slightly better than $BTC, as the weekend low of $2,700 of the No. 2 digital asset has yet to be retested. Yet, it is very likely for $ETH to drop to $2,700, with an eventual bottom of around $2,600 later this month. The VPVR also shows a clear market activity cluster at the level, suggesting $ETH should receive strong support at $2,600. The daily RSI is trending lower while the daily MACD shows a slightly bearish momentum. These indicators also show the markets are grinding lower slowly.

Following Otherside’s land sale, BAYC NFTs’ floor price has fallen dramatically by around 32%, settling at around $135,000 since last week for its cheapest NFT. After the sale was complete, the euphoria died down somewhat, but it was still a great success with almost a $1 billion turnover recorded. Despite this, a backlash to Yuga’s lab auction format was evidenced by the swift tanking of ApeCoin, along with the original Bored Ape NFTs dropping to their lowest selling price since March this year.

Learn more from today’s Trader View video.

Digital Assets Market

  • Total crypto market capitalization stands at $1.80T, -1.4% from yesterday
  • $BTC is +0.36% at time of writing; 24H liquidations and funding rates: 27.81M, +0.00720% average
  • $ETH is +0.40% at time of writing; 24H liquidations and funding rates: 17.26M, +0.01013% average 
  • Stablecoins market dominance: USDT 44.42%; USDC 26.15%; UST 9.96%; BUSD 9.51%; DAI 4.42%

Alts and DeFi watch:

  • DeFi TVL: $198.19B (-0.14% over last 24 hours)
  • $SOL -1.5% in the last 24 hours, -10.2% in the past week
  • $SHIB -1.2% in the last 24 hours, -11.2% in the past week
  • $SAND +2.9% in the last 24 hours, -12.9% in the past week
  • $ENJ +1.3% in the last 24 hours, -15.6% in the past week

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OSL Trader View is contributed by Hans-Stefan Vonhaenisch & Ethan Fu.

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