OTC Weekly Trading Insights (02/07/2024)
In recent months, $OM has experienced significant bullish momentum. The token has increased in value by 65.7% this week, accompanied by a large increase in trading volume.
The rise in $OM's value follows a DAO proposal to increase staking rewards on MANTRA Finance, the decentralized finance (DeFi) ecosystem powered by MANTRA DAO. The proposal received overwhelming support, with 99.6% of voters backing it, resulting in a significant increase in staked $OM tokens.
Chainlink ($LINK), the largest market capitalization token in the Oracle space, broke through its resistance level and traded above $18 last week. It has been trading in the $13 to $16.5 range since November 2023, and it finally broke the upper resistance level, soaring above $19 after large short positions were liquidated. Currently, it is trading above $18.
Terra Luna Classic ($LUNC) had volatile trading sessions over the weekend. The 18% increase followed by an 8% retracement in two days posed significant price risks to traders and investors.
Overall Market
The above chart shows the BTC price movement starting in 2024.
Our desk has identified a strong resistance level in the $43,300 to $44,000 range, as shown in the red area. The BTC price attempted to challenge the resistance level several times last week, but all attempts were rejected. Price rallies typically occur right before the US session begins and fade away after the US session ends. The time pattern suggests that the recent BTC buy flows are primarily driven by inflows from BTC spot ETFs.
Meanwhile, our desk noticed that trading volume on the exchange has decreased as we approach the Lunar New Year this Saturday, February 10, 2024. The Lunar New Year is a major festival in many countries and cultures, and a lower trading volume is expected during the holiday season. That being said, we anticipate a consolidation of BTC prices in the coming days before the market finds a direction.
Google recently approved the advertising of some cryptocurrency products, such as spot ETFs for Bitcoin. Facebook and Instagram, two of the most popular social media platforms in the United States, are planning to allow businesses to advertise spot Bitcoin ETFs. The change represents a significant step toward greater mainstream acceptance of cryptocurrencies.
The above chart shows the ETH price movement starting in 2024.
Ethereum has outperformed Bitcoin in recent days, with the ETH price rising back above $2,300. However, ETH is also encountering resistance between $2,350 and $2,390, as shown in the red zone.
The SEC delayed its decision on several Ethereum spot ETF applications last week, as the market expected. Analysts predict the SEC will approve the Ethereum spot ETF in May.
The recent increase in the ETH price could be attributed to staking on EigenLayer, an Ethereum-based restaking protocol. EigenLayer's total value locked (TVL) increased by $1.8 billion after the developers removed the upper limit on all pools for various liquid staking tokens. The large increase in EigenLayer's TVL was primarily due to the deposit from Lido's sETH. ETH holders can earn higher rewards by restaking their staked ETH on EigenLayer.
The restaking feature encourages ETH holders to stake their ETH with higher rewards while also lowering market supply by reducing the amount of ETH in circulation.
Options Market
The above table shows the at-the-money implied volatility on BTC and ETH options with different expiry dates.
Following the recent consolidation of BTC and ETH prices, implied volatility has fallen below 40% on the front end. The IVs for BTC and ETH's seven-day expiry options are 35.16% and 37.88%, respectively.
The IVs of long-dated options are around 50%, down from 60% one month ago.
Retracements of IVs on BTC and ETH options are consistent with our expectations. We anticipate a slow trading flow over the next week or so during the celebration of the Lunar New Year. Our desk believes the trading flow will recover and the IVs will move higher as the bitcoin halving date approaches, which is expected to be around April 17.
Macro at a glance
Last Thursday (2024-02-01)
The Eurozone's projected annual CPI growth rate is 2.8% in January 2024, with a projected core CPI growth rate of 3.3%. Both readings exceeded the expected rates of 2.7% and 3.2%, respectively.
The Bank of England maintained its interest rate at 5.25%, unchanged. BoE Governor Andrew Bailey indicated that the central bank was ready to begin easing policy, but only after more evidence that inflation was heading in the right direction.
US initial jobless claims increased to 224k last week, exceeding the expected 213k and the previous week's 215k.
The US ISM Manufacturing PMI was 49.1 in January, higher than the expected 47.2 and the previous month's 47.1. ISM manufacturing prices increased from 45.2 in December to 52.9 in January. The better-than-expected manufacturing data suggests that US manufacturing business activities are improving as the border economy strengthens.
Last Friday (2024-02-02)
US nonfarm payrolls increased by 353k in January, far exceeding the expected 187k. In January, average hourly earnings rose by 0.6% on a monthly basis, exceeding the expected 0.3% increase.
The US unemployment rate was 3.7% in January, lower than the expected 3.8%.
The stronger-than-expected nonfarm payroll growth and average hourly earnings growth support the Federal Reserve's decision to keep interest rates unchanged last Wednesday.
On Monday (2024-02-05)
The US ISM non-manufacturing PMI was 53.4 in January, higher than the expected 52.0 and the previous month's 50.5. ISM non-manufacturing prices increased from 57.4 in December to 64.0 in January. The better-than-expected data suggests that the US economy is in expansion mode.
The Reserve Bank of Australia maintained its interest rate at 4.35%, unchanged. However, RBA governor Michele Bullock left the door open for further rate hikes to address the high inflation rate
Convert Portal Volume Change
The above table shows the volume change on our Convert Portal by zone.
The DeFi zone saw the highest overall increase in trading volume last week. The trading volumes of the recently listed Jupiter ($JUP) account for the majority of the increase in this zone.
The two tokens with the greatest volume increase in the Launchpad zone were Tokocrypto ($TKO) and TROY ($TROY). Our desk has observed strong trade demand for Tokocrypto over the last two weeks, and its price has risen by more than 14% during that time.
In the Layer 1/Layer 2 zone, the decreased volume is primarily due to slower trading activity on large-cap coins. Our desk observes strong trading demand for Nervos Network ($CKB) and Oasis Network ($ROSE); however, the volume increase was offset by a decrease in volume for other coins.
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.
To access manual price quotations, you may visit our Binance OTC platform (https://www.binance.com/en/OTC-Trading/spot), where you can RFQ (request-for-quote) and trade directly with our OTC trading team via a live chat.
To utilise our Algo orders features, you may visit our BinanceAlgo Orders platform (https://www.binance.com/en/OTC-Trading/AlgoTrading).
For any other inquiries on OTC trading, please reach out to us via our email at [email protected] for our trading desk to get in touch with you and get started.
OTC trades may also be automatically quoted on Binance Convert and via API, offering users a quick and simple way to execute trades across 60,000+ pairs with one simple click. Binance Convert supports over 350 tokens listed on the exchange including fiat pairs. Begin trading from as little as 1 USD. To start, simply navigate to the Binance Convert & Block Trade platform (https://www.binance.com/en/convert), select the coins you wish to trade, preview and confirm the quote with settlement reflecting almost instantly in your wallet balance. For details and access to Binance Convert OTC API, please refer to our Convert Endpoints (https://binance-docs.github.io/apidocs/spot/en/#convert-endpoints) and reach out to us at [email protected] if you have any questions or require assistance.
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