CryptoBits: Crypto Rejects Lows Again, Relief Rally to Mid-Range on Debt Deal

Written by
Adam Farthing


May 30, 2023

Key Takeaways

  • BTC tested and rejected $26,000, jumped 6% to $28,450 on debt ceiling deal
  • ETH a follower again, rallying ~5.25%
  • XRP outperformed again; rallied from $0.45 to $0.50
  • Basis marginally firmer with spot strength
  • Vols bottomed Friday, back end looks cheap; no takers for now
  • NFP, EU inflation, China PMI’s this week

Looking back

Crypto majors appeared to be breaking lower out of recent ranges on Thursday morning in Asia, but the move through $26,000 was rejected, and ETH never made much ground below $1,750.  Since then crypto was grinding higher until the news over the weekend of a deal being done to raise the US debt ceiling took us up quite quickly, to print highs around $28,470 and $1,928.  Ultimately though, these numbers are not new ground; merely in the middle of a 2+ month range. XRP has continued to outperform, rallying again from 45 cents to 50 cents.

Flows over the week have again showed a preference for BTC (51.1% buyer) over ETH (47.0% buyer), while we had strong buying in DOG (60.5%), SOL(55.8%) and BCH (59.9%), and strong selling in XRP (63.5%), AVAX (66.6%) and MATIC (58.6%). By region, APAC and Americas were better buyers (both 56-57%) while EMEA were strong sellers (70.2%); by category, exchanges, brokers, and funds were our better buyers (58-60%), while banks were sellers (65.5%).  

Preference to buy BTC over ETH, strong buying in DOGE, SOL, and BCH, strong selling in XRP, AVAX, and MATIC

Exchange traded futures bases have continued to tighten a little: June BTC basis on Binance is up from 4.0% to 6.5%, and the same date on Deribit is up from 2.5% to 3.5%, but on CME the June basis weakened late last week before reverting to around 8%.  OTC borrowing interest remains firm for USD and stables, continuing to indicate a healthy demand to deploy capital to risk.  

Implied volatility plunged even lower depths last week, bottoming out on Friday as usual, with Sept ETH - recently the whipping boy of the crypto vol market - trading below 45%, a remarkable level. Yet it appears there are few players with a strong enough directional view to take advantage of the fire-sale.  BTC vols also moved left, with Jun atm trading close to 40% at one stage. With realised vol for both BTC and ETH continuing to drag in the low 30’s, if one did want to purchase anything for year-end, it would still appear sensible to hedge out decay by selling short dated options, implying again that curves remain too flat, particularly in BTC, with Jun/Sep at only 3.25 vols (5 vols in ETH).

Looking ahead

The highlight of the week will be NFP, where the market consensus is currently for 193k jobs added in May, and unemployment slightly up at 3.5%. However, since US data keeps outperforming, these numbers will be keenly watched, and any strength will almost probably force the market to price in a hike for June rather than July. Outside the US, we have Chinese PMIs on Wednesday, and EU inflation numbers on Thursday.  

Buy/Sell Ratio by Category

Exchanges, OTC Brokers and Funds were better buyers, banks and better sellers

Buy/Sell Ratio by Region

APAC and Americas are better buyers, whilst EMEA were strong sellers

All data sourced from our real time systems supporting global 24/7 crypto liquidity provision

Download Here

About B2C2

More than just a liquidity provider, B2C2 is a digital asset pioneer building the ecosystem of the future.

The firm has unlocked institutional access to crypto by providing reliable liquidity across market conditions. B2C2’s success is built on crypto native technology and continuous product innovation, making it the partner of choice for diverse institutions globally.

Founded in 2015 and majority owned by Japanese financial group, SBI, B2C2 Ltd is headquartered in the UK, with offices in the US and Japan.

B2C2 Ltd is registered in England and Wales under company number 07995888 with its registered office at 86-90 Paul Street, London, EC2A 4NE.  B2C2 Ltd is the parent company of the B2C2 group of companies. Products may be provided by different members of the B2C2 group of companies, depending on the jurisdiction of the client and the regulatory status of the product and/or B2C2 group member. B2C2 is a registered trademark.

Sign up to our news alerts to receive our regular newsletter and institutional insights into the crypto market direct to your inbox.

B2C2 does not transact with or provide any service to any retail investor or consumer. By subscribing to our content, you represent that you are not a retail investor or consumer. Please refer to our disclaimer for further information

Subscribed! Thank you.
Oops! Something went wrong while submitting the form.
We use cookies to improve user experience and analyze website traffic. By clicking “Accept“, you agree to our website's cookie use as described in our Cookie Policy. You can change your cookie settings at any time by clicking “Preferences.