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| Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets July 30, 2021 Sponsored by Bitcoin (BTC) -3.2% $38,893 Ether (ETH) +2.0% $2,359 (Price data as of July 30 @11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.
Good morning, and welcome to First Mover. Here's what's happening this morning: Market Moves: Bitcoin Drops After $1.6B Monthly Options ExpiryThe "max pain point" for the July expiry was $35,000. Technician's Take: Bitcoin Struggles at Resistance; Lower Support Near $34K Lower support near $34,000 could stabilize the pullback into the weekend. And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and me at 9:00 a.m. U.S. Eastern time. Today the show will feature guests: Lisa Bragança, Former SEC Enforcement Division Branch Chief Julia Friedlander, Atlantic Council C. Boyden Gray Senior Fellow and Deputy Director Marek Olszewski, Celo Co-Founder– Lawrence Lewitinn
Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:
Gainers: Bitcoin Cash (BCH): +3.8% Uniswap (UNI): +2.6% XRP (XRP): +2.4% Chainlink (LINK): +2.3% Ethereum (ETH): +2.0%Losers: The Graph (GRT): -5.5% Bitcoin (BTC): -3.2% Algorand (ALGO): -2.5% Litecoin (LTC): -1.5% EOS (EOS): -1.0%The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.
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Market Moves by Omkar Godbole Bitcoin Drops After $1.6B Monthly Options Expiry Bitcoin faced selling pressure on Friday after Deribit, the world’s largest crypto options exchange by volume and open interest, settled monthly options contracts worth $1.6 billion.
The cryptocurrency slipped from $39,800 to $38,500 after 08:00 UTC, the designated settlement time on Deribit. A total of 41,000 contracts expired, of which 22,000 were calls options, and the rest were put options, according to Deribit data.
While the exact nature of the expiry-related flows is not known yet, prices frequently become more volatile after expiry.
Option expiries have gained prominence this year, with the cryptocurrency gravitating toward the so-called max pain point in the lead-up to settlement, and seeing notable directional activity post-expiry. That point is the strike price at which the most open options contracts expire worthlessly. Sellers, typically institutions, try to push prices closer to the max pain point to minimize their losses.
“There is always additional activity before and just after the expiry, especially for relatively larger ones like the July expiry,” Luuk Strijers, chief commercial officer at Deribit, told CoinDesk.
During the bull run, bitcoin (BTC) consistently saw pullbacks toward the max pain point ahead of expiry and resumed gains following settlement, as seen below. Bitcoin monthly expiry (Source: AltcoinPsycho, TradingView) “When BTC was bullish, we’d see a sell-off & volatility increase during expiry week, then pump at expiry,” an options and algo trader who goes as Altcoin Psycho tweeted Thursday. “This time, it’s been the opposite. If price dumps after expiry, that may be a sign that we go lower.”
The overall market mood has been bearish since the beginning of the month, and prices dipped below the critical support of $30,000 on July 20. The cryptocurrency bounced well above the July expiry max pain point of $35,000 earlier this week, and is again facing downward pressure after the expiry.
Data shared by analytics firm Laevitas via Discord shows there has been notable call-option selling at higher strikes after 08:00 UTC. Bitcoin call selling post expiry (Source: Laevitas, Deribit) Investors typically sell calls, which offer insurance against bullish moves, when the underlying asset is expected to drop or consolidate.
A call option gives the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option gives the right to sell. Bitcoin daily chart (Source: TradingView) Bullish flows may return if the cryptocurrency establishes a foothold above the 100-day moving average (SMA) of $40,000. The average has been capping gains since Wednesday. Read the original story here: Bitcoin Drops After $1.6B Monthly Options Expiry
The CoinDesk DeFi Index (DFX), benchmarking the investable DeFi sector, is now available for investors watching decentralized finance, the first true "sector" in cryptocurrencies. It is the latest index by CoinDesk Indexes, the market standard for crypto assets since 2014. The DFX provides a market-cap-weighted benchmark for a representative basket of DeFi-sector cryptocurrencies, composed of assets suitable for long-term holding. Find out more at coindesk.com/indexes/dfx, or email indexes@coindesk.com.
Technician's Take by Damanick Dantes, CMT Bitcoin Struggles at Resistance; Lower Support Near $34K Bitcoin (BTC) declined from the $40,000 resistance level during Asia hours. The short-term uptrend appears exhausted, although lower support near $34,000 could stabilize the pullback into the weekend.
The intermediate-term downtrend is in effect, defined by lower price highs since April. Buyers have consistently taken profits at resistance levels, although there has been a significant loss of downside momentum since the May low around $30,000.
Bitcoin was trading around $38,800 at press time and is down 3% over the past 24 hours. Bitcoin daily price chart shows support and resistance levels with RSI (Source: TradingView) The relative strength index (RSI) on the daily chart is the most overbought since April, which could keep short-term sellers active towards lower support levels.There is strong resistance between $40,000 and $42,000, which is near the 100-day moving average. The 50-day moving average is sloping upwards near $34,000 support, an indication that buyers are responding to improving momentum.
Read the original story here: Bitcoin Struggles at Resistance; Lower Support Near $34K
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BOLO Be on the look out for some of these upcoming events: Before 13:30 UTC (9:30 a.m. ET):Cboe Global Markets (CBOE) earnings. Est. EPS: $1.36 Consumer spending (June). Est: +0.6%
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ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:
Robinhood IPO, New IRS Crypto Provision, Are Stablecoins Securities? "First Mover" dives into today's top stories, including Robinhood's debut on Nasdaq, new crypto requirements added to the infrastructure bill, and the continuing debate over stablecoins: Are they securities? Guests include Tom Pageler of Prime Trust, Rich Rosenblum of GSR Markets and Carlos Domingo of Securitize.
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is.
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