Investment review for the 30th week of 2022 (25-31.07.22)

Total investment result for the week: +1.69% or +43.53$.

Stocks

• ETFs SPY (S&P 500 Index): +4.28% (+$16.90).

The past week has been eventful. First, we learned about the decision on the new FRS rate – it increased by 0.75% and reached 2.5%. It coincided with market expectations, and investors began to slowly exit bonds and buy shares – which led to the growth of the indices. There is also a lot of talk about the fact that inflation has peaked, and some indicators hint at this. The fall in inflation will allow the Fed to ease policy and raise rates more slowly, which is positive for the stock market and risky assets.

On the other hand, the data on US GDP shows a fall for two quarters in a row. The economy has entered a technical recession, but it is essential because inflation has eaten all the growth. The reports of the largest companies, Microsoft, Alphabet, Meta and Amazon, were somewhat worse than forecasts, but Apple, MasterCard, Visa and Pfizer are in order. In general, the period is difficult for the markets, but the situation does not look catastrophic at the moment.

Cryptocurrencies

• ADA Cardano: +3.16% (+0.55$);
• BNB Binance Coin: +11.07% (+$4.43);
• BTC Bitcoin: +4.83% (+3.49$);
• DOT Polkadot: +18.43% (+$1.50);
• ETH Ethereum: +7.60% (+6.35$);
• NEAR Protocol: +2.64% (+0.23$);
• SOL Solana: +7.66% (+$1.34).

Cryptocurrencies have grown following the stock market; Bitcoin almost reached $25,000 during the week but has rolled back so far. Cryptocurrency has attracted a lot of attention to Ethereum Classic (ETC), which miners can switch to after the transition of the main Ethereum to the Proof-of-Stake algorithm in September-October. The coin has grown by more than 100% in a month.

Precious metals

• Gold (PAX Gold): +2.57% (+8.16$).

The increase in the Fed rate, within the framework of analysts’ expectations, led to a drop in US bond yields, which led to a slight decrease in the dollar value. Precious metals, traded in dollars, began to rise in price.

Deposits

• UAH (Monobank 9.22%): 0.00% ($0.00);
• BUSD (Binance USD 10-13%): +0.21% (+0.59$).

Week 25-31.07.2022

Name of the asset (group)	For 2022, %	07/25/22 USD	Portfolio share, %	Week, 30.07.22	USD profit	Profit, %
INVEST. PORTFOLIO USD	-19.21	2579.20	100.00	2622.73	43.53	1.69
MONEY IN RESERVE, USD		698.96	27.10	698.96	0.00	0.00
Share ETF SPY	-13.00	395.09	15.32	411.99	16.90	4.28
Deposit e BUSD Binance USD	5.82	287.06	11.13	287.65	0.59	0.21
deposite  Monobank UAH	-21.22	785.36	24.53	632.73	0.00	0.00
Precious metal PAXG Pax Gold	-3.33	317.97	12.33	326.13	8.16	2.57
Crypto AD Cardano	-58.26	17.39	0.67	17.94	0.55	3.16
Cryptobnb  BinanceCoin	-42.89	39.99	1.55	44.42	4.43	11.07
Crypto BTC Bitcoin	-45.14	72.20	2.80	75.68	3.49	4.83
CryptoDOT  Polkadot	-67.14	8.14	0.32	9.64	1.50	18.43
Crypto ETH Ethereum	-51.31	83.53	3.24	89.88	6.35	7.60
Crypto NEAR Protocol	-55.62	8.65	0.34	8.88	0.23	2.64
Crypto SOL Solana	-72.83	17.50	0.68	18. 54	1.34	7.66

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Despite the negative macro, BTC and ETH are gaining momentum  

The top two cryptocurrencies, BTC and ETH, have entered a new uptrend despite the news that the US economy is entering a technical recession.

BTC and ETH rose within hours of the release of US GDP data; the total capitalization of the crypto market increased by about $40 billion after the information after the US economy was reported to have contracted for the last two quarters in a row. The Bureau of Economic Analysis confirmed that US GDP fell 0.9% yearly.

Since the US economy is technically in recession, investors have turned their attention to BTC, and the asset is showing a desire to move higher.

Tom indicator DeMark (TD) Sequential has given a sell signal on the 4-hour chart. While the bearish signal suggests a pullback to $23,260 or even $22,690, BTC is showing strength on its way to $24,000. A 4-hour candle closes above this critical resistance area could negate short-term pessimism and push the asset up to $25,500.

The ETH exchange rate rose well, allowing the asset to break through the critical resistance area at $1650. The TD risk line at $1,750 is the next hurdle that ETH needs to clear for the next move.

A 4-hour candle closes above $1750 and could create enough bullish momentum for ETH to rise to $1830 or even $1900. However, ETH must hold above $1680 to confirm the bullish thesis. In case of failure, a burst of profit-taking may occur, lowering the rate to $1600 or even to $1550.

Although macroeconomic conditions continue to worsen, market participants believe that the latest US GDP data has been factored into the rates. Negative growth could also force the Fed to switch to a more easing monetary policy earlier than expected.

Cryptoanalyst told what to expect from 5 well-known altcoins 

Cryptanalyst Mikael van de Poppe told what to expect in the course plan from 5 well-known altcoins.

He noted that now Cardano (ADA) is trying to overcome the resistance level:

“ADA looks strong, but resistance around $0.53 needs to be broken. If all goes well, we can expect $0.67, although I would prefer to go long around $0.48”.

Avalanche Tier 1 platform (AVAX) is facing resistance similar to the rest of the cryptocurrency markets:

“AVAX is likely to rise above $30, but even here, it is necessary to overcome the resistance level around $25”.

And here is the high-performance blockchain Zilliqa (ZIL) is likely to decline:

“On ZIL, you can fix drawdowns of the order of $0.0375 or potentially consider the indicator of $0.041 as a trading level. The growth to $0.052 is possible”.

Polygon’s second layer scaling solution (MATIC), the analyst predicts a significant drop from current levels:

“On the MATIC for opening valley positions, I would pay attention to the area around $0.73. Earlier, I said that the rate around $1 is like a pump”.

Van de Poppe believes the Fantom (FTM) layer one blockchain correction will continue:

“After a major impulse, there is usually a significant correction. FTM is the same story. Although the impulse may be upward, you must understand that corrections occur during it. On the other hand, an area has been set for opening long positions in the region of $0.28, and it is a good position to start from it”.

Considering the bitcoin price dynamics, the analyst believes that Bitcoin will have good potential to go long in the $22,000-22,500 range.  

Ethereum options trading volume surpassed Bitcoin for the first time 

Open interest in Ethereum options exceeded genuine interest in Bitcoin options for the first time on Monday.

According to Glassnode, at press time, the cumulative value of open interest on ETH contracts on the dominant crypto derivatives exchange Deribit was worth $5.6 billion, which is more than $4.3 billion of genuine interest in BTC.

Bitcoin and Ethereum on Deribit

Deribit accounts for over 90% of the world’s options trading volume and open interest.

“According to Glassnode, Deribit ’s Ethereum options open interest of $5.6 billion has exceeded the open interest of Bitcoin options for the first time in history, and the open interest of Bitcoin options is about $4.3 billion,” Colin Wu wrote on August 1, 2022, on his Twitter.

Most of the options on ETH were calls, as evidenced by the put/call ratio of 0.26. Meanwhile, BTC options had a Put/Call ratio of 0.5. A bull trap breeds in Ethereum when the “crowd” is planted in an asset on expectations of positive news. And in the end, most will lose.

Much of the bullishness in ETH betting is emerging as the merger date approaches, which means the blockchain is moving to Proof – of – Stake, which should bring many changes, including a reduction in net ETH supply. Whether the transition will take place is a big question; most likely, it will be postponed again.

Deribit Insights notes that the implied volatility of ETH in-the-money ( ATM ) options has risen more significantly than the implied volatility of BTC. It also speaks of higher risks in Ethereum than in Bitcoin. Not only are people put into call options that indicate an increase in an asset, but they also do it at inflated prices because the higher the volatility, the more expensive the options.

ATM volatility levels, implied by options on BTC, jumped in the same way as ETH during both bursts in May and June, but after each crash, they rose by only ten percentage points compared to ETH’s 20 points,” Deribit wrote.

“This has resulted in a three-month uptrend in ETH options ATM volume higher than BTC, which is expected given the former’s larger decline from November highs.”

Conclusion

A bias in the ratio of call and put options towards calls is a market inefficiency. It must eliminate it. It can happen in two cases – either the volume of puts will increase, or the importance of calls will decrease. Both can occur in a falling market. Shortlists will gain puts, and call holders will eliminate losing positions.

In addition to the usual markets, the Ethereum puppeteers also decided to cash in on the options market.

CoinShares: July was the most successful month of 2022 in terms of the inflow of funds into crypto funds   

Last week, crypto funds managed to raise $81 million, which marks the fifth consecutive positive week.

The last month of this year was the best in cash inflows, with $474 million pending, which nearly offset June’s outflow of $481 million.

Regionally, North America accounted for most of the capital inflows, with the US and Canada totalling $15 million and $67 million, respectively.

BTC funds managed to raise $85 million, and outflows from Bitcoin shorting products amounted to $ 2.6 million, the first negative week after a 5-week positive streak.

Investment products based on several crypto assets have witnessed a $3.7 million outflow of funds. The second consecutive week of capital withdrawal indicates investors’ focus on choosing investment objects.

ETH-focused funds have raised $1.1 million, while Solana-based funds have raised $1.5 million, remaining the favourite for investors this year. Since the beginning of the year, the inflow of funds to SOL amounted to $114 million. On the other hand, from ADA funds, investors withdrew $0.7 million.

Despite being bullish on cryptocurrencies, trading activity is still relatively low, with trading volumes of $1.3 billion last week, while this year’s average is $2.4 billion.

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