15 October 2021

Market deep dive: Volume is concentrated in bitcoin and ether

Daniel Kukan

Daniel Kukan

Senior Trader at Crypto Finance (Brokerage) AG

About the author

$BTC remained very strong over the course of the trading week, and outperformed almost all other coins once again. The weekly gain is more than $5,000 (+9.5%).

$ETH started catching up towards the end of the week, and the spread is currently trading at 0.064, which is 6.5% higher than the week’s trading low of 0.06.

In terms of at the money volatility, bitcoin has not changed a great deal, but started to increase before the weekend in basically all tenors.

Risk Reversal structures are becoming expensive as downside skew increased permanently during the upmove. Overall funding strategies are not overstretched at all, and all of these factors (paired with the outstanding approval of an ETF in the US) is giving bitcoin greater potential on the upside to soon reach an all time high.

During the last few weeks, bitcoin led the way from an important support level of $40,000 to almost $60,000, and easily outperformed nearly all the altcoins.

The question is: will we soon see an altcoin rally? As long as bitcoin stays strong, it will be difficult for other coins to outperform the “King”. As we saw in 2020 before the end of the year, bitcoin needed to calm down a bit and consolidate before the altcoins could catch fire and start catching up.

At the desk, the volume has slowed down a bit, and investors have taken some profit, but more interesting is the fact that the volume is concentrated more or less in bitcoin and ether. We expect a rather volatile weekend ahead as the market is highly uncorrelated at the moment.


Read more