Welcome to another edition of Qume Market Mondays!
World recovery in progress:
After the Hang Seng index plunged 5.56% last week with China announcing new national security laws involving Hong Kong, this week saw the Hang Seng index up by more than 3.36% and the Shanghai Composite up by 2.21%.
Economic activity is picking up across the world with countries lifting lockdown restrictions slowly and in parts while focussing their resources on coronavirus hotspots.
Bitcoin also has been in a recovery mode since our last edition with BTC-USD up 10.465% from last week’s low of $8,669, now holding at $9,500 levels. Although investors have been expecting Bitcoin price to cross the $10,000 mark since halving, bitcoin futures volumes’ have decreased in the last couple of days and the steady recovery this time could finally lead to BTC crossing $10,000.
Open interest in bitcoin futures has been on the rise with daily volume registering over $3.5bn. We believe the bullish expectations will continue to mount and result in greater volatility in time.
The market has not been up to the investors’ expectations since March, with the realized volatility consistently being in the (6.5%, 6.8%) range and the implied volatility being lower but dropping significantly from 6.8% in mid-March to now at 3.8%.
BTC options interests have been on a dramatic rally, with Deribit leading the race hitting the $1bn mark thrice last month. On 19 May, it registered a record $1bn in open interest, then again on 22nd and 28 May.
On 29 May, it registered a record $1.1bn in open interest volumes. This signals that price recovery is strong and we may see some interesting price movements this week.
Bitcoin NVT signal has also recovered significantly.
This may signal that BTC will rally furthermore and we could see it at $10,000 in the upcoming week. This, of course, comes under posterior assumptions.
Data Sourced from www.skew.com
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