OTC Weekly Trading Insights (03/20/2025)

Top Interest of the WeekAPI3 is a decentralized Oracle platform that links on-chain decentralized applications (dApps) with trustworthy external data sources, utilizing its native ERC-20 token, API3 ($API3). As an oracle protocol, it ensures that its data feeds are both verifiable and resistant to tampering, thereby facilitating the operation of smart contracts across various Ethereum and Ethereum-compatible platforms. What sets API3 apart is its integrated protection against maximal extractable value (MEV), ensuring that dApps utilizing the platform receive compensation. At its essence, the oracle allows for the automatic extraction of oracle extractable value (OEV)—a specific category of MEV—by optimizing the batching of oracle updates. Recently, Moonwell made the decision to transition from Chainlink to API3 for all its markets.The native cryptocurrency of The Open Network layer-1 blockchain, Toncoin ($TON), experienced a significant rise following a modification in the bail conditions of Telegram's CEO and co-founder, Pavel Durov, which permits him to travel from France to Dubai. French authorities have provided Durov with temporary clearance to exit the country, easing the limitations imposed on him amid an ongoing criminal investigation. As a result of this positive development, the price of TON jumped by 34.7% over the past week, accompanied by a 52.1% increase in trading volume driven by robust market demand.Overall MarketSource: TradingViewThe above chart is the BTC price in the daily candle chart at the log scale.Our analysis from last week revealed that the $76k level serves as a support point for the market. Although BTC is trading within a downward channel, it has shown resilience against further declines. This suggests that the market was oversold and that bearish sentiment was unable to drive prices lower. However, as we previously mentioned, there are potential challenges for crypto assets, especially with the tariffs the US administration may implement starting April 2. Therefore, we expect the short-term BTC movements to be a rebound instead of a V-shape reverse.Over the weekend, a trader opened a $500 million short position on BTC with 40x leverage on Hyperliquid, a decentralized exchange. This position, which had a narrow liquidation threshold, generated significant discussion on social media, with several KOLs attempting to target the trader's liquidation price. Nevertheless, the BTC price remained capped at the $85k mark, enabling the trader to close the position with a $6 million profit. This situation suggests the weakness on the BTC long side remains.On Wednesday, the Federal Reserve opted to maintain interest rates while signaling two potential rate cuts in the future, as shown in the dot plot. Additionally, it announced a reduction in its quantitative tightening program, lowering the monthly redemption pace of Treasury bonds from $25 billion to $5 billion. This easing of quantitative tightening is anticipated to improve liquidity, which should positively impact risk assets, particularly BTC and other cryptocurrencies that are highly sensitive to changes in global liquidity.Our analysis, however, indicates that the market may have been too optimistic regarding the Federal Reserve's improvements in global liquidity and the anticipated number of rate cuts this year. We believe that the current bullish sentiment is likely to be short-lived, and the market dominated by bearish sentiment for BTC and the broader crypto market is expected to continue over the next few months.The Fed officials have adjusted their core PCE inflation forecast from 2.5% last December to 2.8% in March for the end of 2025, which is 80 basis points above the 2% inflation target. Additionally, 18 out of 19 officials acknowledge that inflation risks are skewed to the upside. Furthermore, US inflation may increase due to new tariffs imposed by the administration. While Fed Chair Powell mentioned that the impact of tariffs on inflation is uncertain and could be "transitory", the likelihood of rising inflation is becoming more pronounced. If inflation in the US does not decrease, we may not witness two interest rate cuts in 2025, and monetary policy could remain somewhat restrictive.On a more positive note, we observe a temporary bullish reversal in the daily RSI for BTC. The price movement on Wednesday, following the Fed's interest rate decision, allowed the BTC daily RSI to break through its downward trend line. If the RSI continues to rise, it may indicate that BTC's price could stabilize between the two red bars shown in the chart, awaiting an improvement in market sentiment.Options MarketThe above chart is the at-the-money implied volatility for BTC and ETH options.Following the Federal Reserve's interest rate announcement on Wednesday, cryptocurrency prices experienced an uptick, leading to a shift in the anticipated volatility for Bitcoin (BTC) and Ethereum (ETH) options. The implied volatility (IV) for a 180-day BTC option is 9% higher compared to a 7-day option, indicating a steepening volatility curve. In contrast, the 180-day IV for ETH is just 5.2% higher than the 7-day IV, suggesting a flattening curve.When comparing options with the same expiration, BTC options exhibit an IV that is over 10% lower than that of ETH options across all durations. Traders can capitalize on this by purchasing BTC straddles while simultaneously selling ETH straddles that share the same expiration dates and notional values. This strategy mitigates directional risk (delta) and allows traders to take advantage of the IV disparity while minimizing other risks.For traders who foresee a rise in BTC but expect resistance around the $91,000 mark, a long call spread can be an effective strategy. This involves buying a call option at a lower strike price and selling another at a higher strike price. This approach not only offers the potential for profit but also does so at a lower cost by utilizing the premium gained from the sold call option.Our Option RFQ platform empowers traders to seize these opportunities with ease and efficiency. Offering a wide array of strategies—from vanilla call and put options to advanced plays like Call Spreads, Put Spreads, Calendar Spreads, Diagonal Spreads, Straddles, and Strangles—the platform delivers competitive pricing and seamless execution. Its intuitive interface lets you pick your instrument and get an instant quote, simplifying the process and enabling you to act swiftly on market conditions. Whether you’re hedging or speculating, this tool enhances your ability to navigate the options market with confidence.Binance users can access our Options RFQ platform via: https://www.binance.com/en/vip-portal/OTC-trading-platform?ref=OTC-OptionFor more details, you can also check the FAQ page for Options RFQ: https://www.binance.com/en/support/faq/detail/6d3a80c6574f482eb45457eac64bbff6Macro at a glance Last Thursday (25-03-13)The US initial jobless claims were recorded at 220,000 last week, surpassing the anticipated figure of 226,000. This indicates that the US labour market continues to be strong, with minimal layoffs. The US Producer Price Index (PPI) showed no change at 0.0% in February, falling short of the expected 0.3% and January's 0.6%. This subdued PPI data points to reduced inflationary pressures from the supply side, potentially reducing worries regarding inflation driven by costs.Last Friday (25-03-14)The German Consumer Price Index (CPI) showed a monthly rise of 0.4% in February, resulting in an annual increase of 2.3%. The one-year Michigan inflation expectation is projected to be 4.9%, higher than 4.3% in February, marking a significant rise from the 2.8% forecast at the start of the year. Additionally, the five-year inflation expectation is set at 3.9%, up from 3.5% in February. These rising inflation expectations indicate that US consumers are increasingly concerned about future inflation, potentially influenced by the tariff policies enacted by the administration.On Monday (25-03-17)US retail sales experienced a monthly increase of 0.2% in February, which fell short of the anticipated 0.2%. Additionally, the data for January was adjusted downward to reflect a 1.2% decrease. Meanwhile, core retail sales recorded a monthly growth of 0.3% at the same period, aligning with expectations.On Wednesday (25-03-19)The Bank of Japan maintained its interest rate at 0.50% on Wednesday, cautioning about increasing global economic uncertainty. It signals that the timing of any future rate increases will largely hinge on the repercussions of potentially elevated U.S. tariffs. The Federal Reserve kept its interest rates unchanged, as widely expected by the market. The dot plot indicates that policymakers still anticipate two rate cuts later this year. Additionally, the Federal Reserve has decided to reduce the monthly Treasury redemption pace from $25 billion to $5 billion, while maintaining the monthly mortgage-backed securities (MBS) redemption at $35 billion, starting in April. This further quantitative tightening scaleback has positively influenced market sentiment, leading to a rally in risk assets. The S&P 500 closed with a gain of 1.08%, and the Nasdaq index surged by 1.41%. Bitcoin traded above $85,000 in the bullish backdrop.On Thursday (25-03-20)The Bank of England maintained its interest rate at 4.50% during its March meeting, a decision that had been highly anticipated by the market. In its statement, the central bank expressed concerns about the UK economy facing uncertainties related to global trade and the potential for stagnation domestically.US initial jobless claim reported at 223,000 last week, with the previous number revised higher from 220,000 to 221,000. The data suggests the US labour market remains relatively stable.Convert Portal Volume ChangeThe above table shows the volume change on our Convert Portal by zone. Last week, we observed a minor decrease in our Convert volume, primarily attributed to Bitcoin's challenges in surpassing the $85,000 resistance level and the muted trading flow on altcoins. Our desk also observed a notable shift in trading dynamics, with a considerable amount of trading activity migrating to DEX trading on the Binance Smart Chain (BSC). This trend is especially evident in the realm of meme coin trading, where participants are increasingly engaging in transactions with our new feature, Binance Alpha 2.0.In the BNB Chain sector, there was a slight reduction in trading volume, which fell by 3.7%. This minor downturn can largely be linked to the strong trading interest surrounding Pancakeswap ($CAKE). The popularity and demand for Pancakeswap ($CAKE) have played a significant role in shaping the trading landscape, influencing overall activity within the BNB Chain ecosystem.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!