ICYMI, @coinmetrics@coinmetrics put together this incredibly comprehensive 40 page ETH research report:
"Mapping Out The Merge"
We found it quite informative and wanted to be sure to share it with our readers in TLDR format, with a few of our fav metrics for added context
Crypto markets have been rallying with force for the past 8 weeks, BTC is up over 25% from its early summer lows and ETH's>100% during its long-awaited merge rally
But is this price action sustainable? Is there a historical precedent for continuation?
Let's check the data...
NYC hours = Volatility
Since the start of July, the bulk of BTC / ETH gains have been generated during NYC market hours (13:00-21:00 UTC) while European and Asian trading session returns have remained mostly flat to -ve
So what does this mean and why is it significant?
NYC is the financial capital of the world, trillions of dollars are traded weekly on stock and crypto exchanges during this session
This time is also when significant news & Fed policies are discussed
This action is what creates the correlation between BTC and the S&P 500
Last month we covered the funding rate model and how it can be deployed as a potential trading strategy. That led to few enquiries on longer holding period and returns. Let's cover that in this thread.
ETH has been performing very well past week.
Although, there is an interesting behaviour on FTX-Perp to take note of.
Let us dig into it in this thread.
Anomalies in markets are typically a sign of unsustainable price action taking place.
During ETH's seismic 60%+ pump over the past week we noticed one such alarming anomaly unfolding, and we found it on FTX's leaderboard...
Lot of noise and news about 'alleged' Microstrategy #BTC wallets draining out in full. Tesla's partial exit from BTC holdings in their treasury adds more fuel to this noise. Let us take a look in this thread.
The 'alleged' #MSTR#BTC wallet is 1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ, which is revered to be a top trader wallet.
Markets run on trends and momentum.
We can measure both with 30d returns. A metric that shows the short-term profit & loss of the market as a whole.
This chart shows ETH's 30d returns moving towards 0% after being deeply negative since April & below we unpack the idea...
/1: Funding rates went negative. Now analysts are saying its time to go long and a reversal is coming. Is there any truth to this?
Today we see what the data says and showcase a strategy you can employ to grab some alpha. #BTC
/2: To start off, funding rate is defined as the cost to hold a perpetual futures position open. Each exchange has subtle nuances to this, but generally speaking it updates periodically throughout the day and has a baseline where long positions pay short positions.