0/ In today’s Delphi Daily, we published a post mortem of yesterday’s sell-off.
We examined market leverage, liquidations, open interest, and implied volatility.
For a deeper dive into today’s report 🧵👇
1/ Market Update-
🔹The last 24 hours have been chaotic for crypto markets, with a liquidity crisis causing some of the sharpest candle wicks we’ve ever seen.
🔹L1 tokens are rebounding the hardest with NEAR and ALGO outperforming everything, and LUNA not too far behind them.
2/ $4B and $3.6B of BTC and ETH OI were respectively wiped out yesterday.
Looking at the absolute OI levels, it’s quite clear we were growing too fast. But looking at OI growth relative to market cap helps us discern if leveraged traders were getting ahead of themselves.
3/ Yesterday was a case of longs get liquidated, implying whales buying cheap BTC from leverage traders who got in over their heads.
4/ More often than not, events like yesterday are explained by a sudden collapse in liquidity.
Looking at the bid-ask spread for a $5M BTC futures buy, the spread was never above .5%, until suddenly it jumps up to 4% on @DeribitExchange and around 1.5-2% on others.
5/ Realized volatility is now on the rise and it’s very possible the market goes through a period of ranged price action.
It’s starting to look like we could be in for a period of high volatility, so prepare accordingly.
0/ In today’s Delphi Daily, we examined the state of crypto derivatives.
We looked at open interest, BTC options, and trading of leveraged funds.
For a deeper dive into the state of derivatives 🧵👇
1/ Quick Market Update-
🔹BTC and ETH are finding strength, but what’s more surprising is today’s biggest winners are DeFi blue chips.
🔹DeFi coins have seen muted price action for months now, and a strong trend could catch several who ditched the sector.
2/ Looking at the global open interest, we see a concentration of capital at $50K, $60K, $80K, and $100K.
This doesn’t necessarily infer bullish sentiment, as for every ape buying an out-of-the-money call, there’s a seller who believes the option will expire worthless.
0/ In today’s Delphi Daily, we took a brief look at market structure.
We examined the impact of leverage in the market, implied volatility of $BTC, CME’s open interest, and Ethereum DEX volume.
To dive deeper into this analysis 🧵👇
1/ Market Update-
🔹The markets are red again, with BTC and ETH both nuking into the Asia session and consolidating near the lows.
🔹AVAX is down 18% over the last 2 days, and Avalanche ecosystem coins took a hit too.
🔹SAFEMOON and SOL are unfazed by the downturn.
2/ A useful metric to gauge leverage is the ratio between BTC’s OI across futures and perps, and its total market cap.
On its own, this probably isn’t a very useful data point. But with the context of price and trend structure, we can actually pull away some useful insights.
0/ In today’s Delphi Daily, we examined the recent habits of $BTC whales.
We also analyzed USDT outpacing USDC, Ethereum hash rates, and adopting on the Lightning Network.
To dive deeper into todays daily 🧵👇
1/ Market Update-
🔹The market is continuing on yesterday’s consolidation, with BTC and ETH moving lower.
🔹L1s like SOL, LUNA, and FTM were affected the most given the L1 run-up the past week.
🔹AVAX and BNB, however, remained resilient during this pullback.
2/ USDC issuance falls, and USDT slips back into pole position.
However, Cirlce recently announced a re-allocation of assets backing USDC into safer investments like bank deposits and short-term treasuries, which could inspire more confidence in USDC and push issuance back up.