Key Takeaways
• Range bound market: BTC $19.5k to $20.5k, ETH mostly inside $1,525 to $1,625

• Ahead of merge, ETH volumes remain higher than BTC in spot, futures, and options

• No significant new flows or moves in funding or options markets

• Expect ETH and BTC to follow different stories over the next few weeks

• BTC will trade with broad risk, while ETH will depend on success of coming upgrades

Looking back

It was another quiet week in crypto, with BTC trading within a $19.5k to $20.5k range, while ETH spent the majority of the week within $1,525 to $1,625, with two short-lived spikes, one down to $1,475 and one up to $1,650. The outperformers were ADA, MATIC and LTC, all of which rallied around 10% over the course of last week.

Our biggest volume coin was ETH again, where we had fairly balanced flows, while in BTC we saw a repeat of a fair bias towards buy flows. We also saw strong buy flows in ADA, EOS and MATIC; and strong sell flows in LTC. By client category, we saw a bias towards buying from retail brokers, funds and banks; by geographical region, we saw good buying out of APAC and the Americas.

Futures basis in BTC is unchanged on the week, trading around flat to 1 month and 3 month on major exchanges. September ETH basis has dropped to around $23 under spot, down $2-3 from last week. Futures market volumes remain around 10% higher for ETH than BTC.

In options, ATM volatility has done little this week, with Sep ATM vols for BTC at 65% and for ETH at 100%, both unchanged. Put skew has however gradually increased in BTC, with Sept 25del r/r from 8 to 11 vols, while ETH riskies are unchanged at 10vols for puts. Although ETH options volumes again outstripped BTC volumes by about 10%, we didn’t really see any hugely interesting Merge plays being put on last week, so perhaps the market is already positioned and now just in ‘wait and see’ mode.

Looking ahead

Macro traders will look for ISM Services PMI tomorrow, and the ECB rates decision on Thursday. Next week we have US CPI, followed the week after by the FOMC rates decision. Macro’s apart, all eyes will be on the ETH merge, with the Bellatrix upgrade tomorrow. Given that BTC is currently without a story, one would expect it to follow the macro indicators, whereas ETH is more likely to trade on its own story. One would imagine there is considerable vested interest in the cross right now, so watch that for clues. Current range 0.077 to 0.081.

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