Thursday, 28 October 2021

Market Summary

Market Summary 28 October 2021

Leverage Wipes Out, But Is the Worst Behind Us?

  • The last 24 hours have been a whirlwind for crypto markets with base layer tokens taking the biggest hit, many of which are down a fair amount from yesterday’s highs. ATOM’s two-day performance is still in the green thanks to yesterday’s rally; SOL, AVAX, and NEAR are all down at least 8-12%.
  • Outliers in today’s ugly market comes, surprisingly, in the form of DeFi tokens and SHIB (aka “the DOGE killer”). 1INCH price action today was overwhelming and likely catalyzed by the token’s listing on Korean exchange Upbit. AAVE was also listed on Upbit, and within an hour of the listing, both tokens had already established a “Kimchi premium.”
  • The steep dip in prices caused a meaningful liquidation cascade, the vast majority of which occurred within a 40 minute time period at around 7:30 AM UTC today.
  • While unfortunate for the poor souls who were liquidated, the market was in need of a proper deleveraging. There was too much momentum built up from $60K onwards, almost entirely caused by leveraged traders. With not much demand to push BTC and ETH beyond their recent ATHs, it seemed the only way up was to drawdown first.
  • The average daily funding rate across exchanges is down from its recent high a few days ago, but it looks like there’s still some room for rates to fall.
  • Open interest on exchanges like Binance and Huobi experienced a massive wipeout, which confirms the aforementioned deleveraging. In fact, funding rates on exchanges like FTX and OKEx turned negative at one point, but were balanced out by positive funding on Binance and Bybit.


El Salvador President Buys the Dip, Adds 420 Bitcoin to Treasury

  • Nayib Bukele, the president and self-described “Emperor of El Salvador,” has taken advantage of today’s drop in Bitcoin prices to increase his country’s BTC reserves.
  • Bukele announced today on Twitter in English (the lingua franca of the Bitcoin ecosystem, but not his citizens) that he had bought the proverbial dip. BTC, which reached an all-time high above $67,000 last week, fell today to below $60,000, according to CoinGecko.
  • The amount of BTC he bought was the icing on the cake: 420 BTC. (For those unfamiliar with the internet, 420 is a meme number associated with the cannabis culture.)


Friday’s jaw-breaking $3.2B Bitcoin options expiry could kick-start a new rally

  • Bitcoin bulls could be in for a $715 million profit if BTC price is above $60,000 ahead of Friday’s $3.2 billion options expiry.
  • Typically, these remarks would have little to no impact on a bullish market, which raises the question of whether the 13% correction since the Oct. 20 all-time high marks the end of a positive cycle.
  • The Oct. 29 monthly expiry will be a strength test for bears because any price above $58,000 means a $385 million or higher profit for bulls.


Shiba Inu fetches a new ATH — 3 reasons why SHIB keeps jumping higher

  • Meme coins burst onto the scene in early 2021 and helped kickstart the bull market after Dogecoin (DOGE) rallied above $0.01 to new highs while being shilled by the likes of Elon Musk and Mark Cuban.
  • One of the biggest factors helping to lift the price of SHIB over the past month has been the increase in user access to the token, thanks to its listing on multiple cryptocurrency exchanges.
  • A second reason for the building strength of Shiba Inu was the launch of its own line of NFTs known as Shiboshi’s.
  • A third reason for the rising strength of SHIB has been the surge in futures open interest (OI) on multiple exchanges including OKEx, FTX and Huobi.


Twitter CEO Jack Dorsey reiterates a positive outlook on Bitcoin tipping during earnings call

  • Back in September, Twitter became the first major social media platform to adopt Bitcoin (BTC) tipping, enabling users to send BTC directly to their favorite content creators through the site’s native frontend. The company also allowed users to send their BTC over the Bitcoin Lightning Network to ensure near-instant settlement times.
  • In response to an analyst’s question regarding how cryptocurrencies play into the company’s overall global strategy, Dorsey said the following during the company’s third-quarter earnings call on Tuesday: “It [Bitcoin tipping] allows for much more speed. Both tipping subscriptions are new. These are products that we want to make sure that again, we started small and we figure out the right product that people want to stick with and they’re evaluating every single day. And then we’ll roll them out to more and more people and scale it and continue to iterate on the product.”


Cream Finance Suffers Third Hack, Loses Over $130 Million

  • Cream Finance has been hacked, losing over $130 million. This marks the third time the DeFi protocol has been hacked. Cream Finance is a lending and borrowing protocol that runs on the Ethereum network. 
  • The attack—a flash loan identified by PeckShield Inc.—resulted in mostly Cream tokens, CREAM, being stolen. 

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