Daily News | FTX Has been Approved to Liquidate Its Crypto Assets, Ethereum Futures Premiums Are Low, Crypto Market Is Experiencing A Serious Liquidity Crisis

Crypto Daily Digest: The well-known online game company Linekong Interactive established a warehouse and purchased about 100 BTCs, FTX has been approved to liquidate its crypto assets

According to reports, Linekong Interactive Group Co., Ltd (08267. HK) , a Hong Kong listed company, announced that according to the company’s announcements on June 15, July 7, August 8, and August 17, 2023, the group purchased a total of 92.4712 units of Bitcoin in public market transactions, with a total cash consideration of approximately $2.66 million.

The announcement states that the board of directors recommends seeking prior approval from shareholders to authorize and empower directors to make potential cryptocurrency purchases during the authorization period, with a total consideration not exceeding $5 million. The group also noted that the price of cryptocurrencies may fluctuate significantly, so the board of directors is interested in investing in the largest cryptocurrencies by market value, such as Bitcoin and Ethereum.

MetaMask has announced a new feature called Snaps, which allows it to be extended to non EVM chains such as Cosmos, Solana, and Starknet. Snaps is a software module that can be integrated with MetaMask, allowing wallets to be used across chains.

According to Coindesk, a Delaware district judge has approved an order allowing the bankrupt cryptocurrency trading platform FTX to sell and invest its $3.4 billion worth of cryptocurrency. The plan shows that most tokens can only be sold for $100 million per week, but the upper limit for each token may be permanently raised to $200 million. When selling Bitcoin, Ethereum, and other tokens, regulatory agencies need to notify the US Trustee Office 10 days in advance.

According to the latest news, FTX has revised its proposal to sell billions of dollars in cryptocurrency assets, but considering the potential impact of the transaction on the market, the revised proposal still states that FTX will not issue a trading announcement in advance.

In recent weeks, compared to Bitcoin futures, Ethereum futures have had a lower premium, and the gap has continued to widen in the past week.

Compared to the spot market, Ethereum futures currently trade at a discount. This indicates that the Chicago Mercantile Exchange (CME) has shown an exceptionally pessimistic outlook ahead of Ethereum futures ETF expectations.

Cryptocurrency research firm K33 Research said, “due to the expected listing of Ethereum futures ETFs in October, which is considered positive news, the current price performance of Ethereum futures looks a bit strange. There are no other signs that Ethereum ETFs will be rejected, and historically, the difference between Ethereum and Bitcoin futures is not a concern.”

According to the latest report from Glassnode, a crypto market intelligence company, the crypto market is currently experiencing a severe liquidity squeeze, with both on-chain and off-chain trading volumes falling to historical lows. Analysts pointed out that although Bitcoin and Ethereum have experienced net capital inflows since the beginning of this year, all three assets have returned to neutral or negative inflows since the end of August, indicating stagnation and uncertainty.

Glassnode’s on chain indicators show that the total dollar trading volume of Bitcoin transactions has dropped to a daily average of $2.44 billion, which is the same level as in October 2020. In the off chain derivatives market, Bitcoin’s daily trading volume has also reached a historic low, falling to $12 billion for the first time since its low point in 2022.

Despite the market downturn, the holding trend remains strong. Glassnode defines the long-term holder group as an on chain entity that holds tokens for more than 155 days, with the group’s holdings reaching a historic high of 14.7 million Bitcoins. Meanwhile, the supply of short-term holders (holding for less than 155 days) has dropped to its lowest level since 2011.

Today’s Main Token Trends

BTC

The overall trend still maintains a sideways trading structure, and at 8:00 am this morning, it precisely touched the turning point of the downtrend, reaching the top of the trading range at $26,510. If the short-term bearish structure continues, this turning point will be the best position for shorting. Continue to monitor the support level within the trading range.

ID

The four-hour chart has dropped from its all-time high of $0.8445 to $0.2070. In the short term, a low-level converging triangle is forming, likely indicating a breakout by the end of this month (possibly earlier). The current price is in a mid-axis structure. A conservative strategy suggests entering near the trendline support, with profit targets estimated at $0.2425 during a rebound. The key support level is at $0.1680.

TRB

In the short term, the four-hour chart is still undergoing consolidation at high levels, but the overall trend is leaning towards a bullish structure. Yesterday, it tested $29.32 twice at the high and quickly retreated to $23.35, precisely retracing to the end of a converging triangle. It is estimated that the market is still undergoing consolidation. Short-term support is at $29.32, and the targets are $31.95, $33.61, $34.95, and $36.29 sequentially.

Macro: CPI meets expectations, Federal Reserve may no longer raise interest rates

The United States’ non seasonally adjusted CPI annual rate in August reached 3.7%, a new high since May this year, and has rebounded for the second consecutive time; The non seasonally adjusted core CPI annual rate in the United States recorded 4.3% in August, which is a new low since September 2021 and has been declining for six consecutive months; After the quarterly adjustment in August, the monthly CPI rate in the United States reached a new high of 0.6% since June 2022. The core CPI rate increased by 0.3% compared to July, marking the first accelerated increase in six months. After the release of core CPI data, the market’s bet on the Federal Reserve raising interest rates before November has increased.

Economists’ expectations are that consumer prices will rise 0.6% month on month and 3.6% year-on-year in August. This will be higher than the 0.2% month on month increase in July and the 3.2% year-on-year increase. But if volatile food and energy projects are excluded, these economists expect the so-called core prices to rise by 0.2% month on month in August, at the same rate as June and July - a period of relatively mild data compared to previous months.

Economists estimate that the core CPI increased by 4.3% year-on-year in August, a slowdown from the 4.7% year-on-year increase in July. The cooling of core inflation rate this summer has laid the foundation for the Federal Reserve to maintain interest rate stability next week, and the August CPI data will provide a reference for the Federal Reserve to discuss whether it is necessary to raise interest rates again later this year. The Federal Reserve has been aggressively raising interest rates for over a year, attempting to lower inflation by slowing down economic growth.

From last night’s data alone, it can be seen that there are mixed emotions. Although the CPI annual rate has been high, the core CPI still meets expectations. In this situation, the market naturally does not have too much volatility, as we can see from the stock market. The three major stock indices in the US have fluctuated, with the Dow down 0.2%, the Nasdaq up 0.29%, and the S&P 500 index up 0.12%.

In addition, some large US bond investors stated on Wednesday that despite the surge in energy prices leading to increased inflation in August, they believe that the Federal Reserve has reached the peak of interest rate hikes.

The Federal Reserve raised interest rates by 25 basis points in July. The bets on the federal funds futures market show that traders generally believe that the Federal Reserve will keep interest rates unchanged at the end of the FOMC meeting on September 20th. However, on Wednesday evening, the market priced 40% for the possibility of another 25 basis points increase in November.