deen

16 July 2021

Market commentary: looking at the impulses for a bull or bear market

Daniel Kukan

Daniel Kukan

Senior Trader at Crypto Broker AG

About the author

Front month implied volatility and trading volume is dropping further now towards the July expiry. The overall term structure is very steep, with shorter maturities being traded much lower than longer tenors. In general, a roll-over of short July positions into September makes a great deal of sense.

ETH volatility is holding up better compared to bitcoin, although the spread between them has also traded lower throughout the entire week.

Despite all of the market facts, the overall situation seems to be rather indecisive and is waiting for more impulses in order to enter a bear or bull market.

Global regulation of digital assets and trading venues continues to tighten. France is proposing an EU-wide cryptocurrency regulation led by the European Securities and Markets Authority (ESMA) as the main supervisor. The world regulators have also announced warnings in regard to the largest exchange: Binance. It is drawing attention to the exchange’s global operations, and hints at future risks.

Investors and speculators are looking for alternatives to BTC and ETH. These alternatives include protocols in the DeFi sector, or investing in a different chain, e.g. Atom, Cardano, or Polkadot, etc. But there are risks involved in these alternatives beyond the market volatility. There are several risks you need to consider when entering a decentralised position: a smart contract bug or failure of an audited or not audited protocol can occur at any time. Oracle and governance failures, liquidity crisis locking up funds until borrowers return them, and a de-pegging are the most common risks.

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