Qume Market Mondays - 17 August 2020
Welcome to another edition of Qume Market Mondays!
Bitcoin has been showing sideways movement this last week and at the time of writing it is trading at $11,800 levels. The daily aggregated open interest for bitcoin has been around $5bn, adding that to the strong price momentum, the market is generating bullish signals.
The probability of bitcoin being above $12,000 for Aug-20 options is 50% and only a 27% chance of hitting the $13,000 mark.
This week, with current price resistance at $12,500 we expect bitcoin to retrace back to $12,000 in spot markets and then consolidate not much above that.
Ether has been on a bullish ride this month. The price of ETH is up 70% from 30-days before, it is currently being traded at $423. Its daily aggregated open interest in futures markets crossed the $1.5bn mark last week.
ETH price as percentage of bitcoin hit this year’s all-time high of 3.7% this week.
Options markets have a bearish outlook on Ether, with the probability of its price falling back to $390 price level in August being 70%.
As the DeFi boom continues, the demand for bitcoin in DeFi has increased substantially, the amount of tokenized BTC generated daily now is more than the amount of daily bitcoin mined.
About 75% of it is WBTC (Wrapped BTC). Dollar value of WBTC is currently at $307 Mn.
Rising institutional demand of bitcoin:
On Thursday, open interest on the Chicago Mercantile Exchange (CME) was $800M. In terms of open contracts it is now the third-largest bitcoin futures exchange.
USA markets have been surging consecutively with S&P 500 registering gains on three consecutive weeks.
Tesla Inc. has announced its 5–1 stock split. Its share prices are up 283.7%, currently trading at $1650. Apple and Tesla stock split could encourage other tech giants such as Amazon, Alphabet to do the same.