Volatile price action continued and the week ended with another massive sell-off in the crypto market (BTC — 13.5%; ETH -14.3%). Bitcoin got rejected at 100DMA ($45k) and went down to $38k. Ethereum saw similar price action as being rejected near $3k.
The downward sloping price action turned funding rates negative, and caused the weekly average funding rate to be zero (Chart 1), spread trading continued to be extremely difficult. On the liquidation fronts, the rising price action last week attracted a lot of leveraged long positions, and thus long liquidations were significant. Generally, the Alts were still underperformed. Despite the strong price actions on the tokens under LUNA ecosystem early this week, they also followed the pull back and wiped out most of their gains ($LUNA +3.7%; $JUNO +11%; $OSMO +3.2%; $ANC +15%)
On the crypto native side, one the greatest Defi infuencers, Andre Cronje, announced his exit of the Defi space. The market reacted violently to the news, several tokens of protocols under his arms were immediately down ($YFI -13%; $FTM -13%; $SOLID -75%). Defi protocols now have to prove themselves without the involvement of significant influencers.
On the institution/governement front, it was relatively calm this week. The ‘Three HK’, the largest telecom company in Hong Kong, has collaborated with FTX-US and started accepting crypto payment. It enabled the use of selected cryptocurrencies such as $BTC and $ETH for paying mobile bills, products and services online. Jamie Iannone, the CEO of the American multinational ecommerce giant eBay, has hinted that eBay may soon accept crypto payment after enabling NFTs. Ukrainian governement has withdrawn the airdrop rewards to crypto donators. Instead of airdrop rewards, the government would be releasing NFTs to support Ukrainian armed forces.
On the macro side, geopolitical tension between Russia and Ukraine worsened this week. The nuclear plant being attacked in Ukraine was the major concern. That was the largest nuclear power plant in Europe, the Russian strike triggered worldwide alarm as of nuclear disaster. Global finance and crypto market slumped together on Friday. Commodities continued its strong rally during hot war (Gold +5.5%; Oil +12.9%; Wheat +31.9%). Commodities risen in demand indicated the negative sentiment in global financial market.
Crypto market continues to be fluid and challenging due to macro uncertainty. We continue to keep our bag light and be patient to capture the next clear trend. Good Luck!