Amber Group Market Weekly Review 211213 | Insights on Bitcoin and Ethereum markets, news highlights

Table of Contents

Digital Currency Market:

Bitcoin and Ethereum Market Insights:

Bitcoin's market dominance dropped to a yearly low of 38.22% last Thursday, but saw a slight recovery over the weekend. Market sentiment remains fearful with the Fear & Greed Index dropping below 1. In the short term, $47,000 is a critical level for Bitcoin, and macro factors such as concerns over inflation, interest rate hikes, or the new COVID variant will continue to impact the crypto market. It is worth noting that Bitcoin balances on exchanges are still decreasing, mostly showing net outflows, indicating that hodlers are still accumulating.

Bitcoin related data: market share, fear index, long/short ratio

Exchange reserves:

Exchange inflow/outflow:

With more protocols and blockchains accepting UST, the supply of UST has doubled since November, making it the fifth largest stablecoin with a market cap of $8.65 billion. Due to UST's minting mechanism, the price of LUNA surged significantly, reaching highs of over $70 last week before a market correction pulled it back to over $50.

Polygon expanded its Ethereum scaling solutions space through the acquisition of the Mir Protocol for $190 million in MATIC tokens and $100 million in USDC. The acquisition was completed on November 26 and announced last Thursday. The Mir Protocol enables fast and cost-effective transactions on the Ethereum network using zero-knowledge proof technology. The Mir Protocol will be rebranded as Polygon Zero post-acquisition. The price of MATIC tokens hit an all-time high of $2.58 after the news.

Despite GameFi being one of the hottest trends this year, there hasn't been a significant rebound in the recent pullback; over the past 7 days AXS -14%, SAND -10.5%, MANA -10%, ENJ -16%.

Options Market Insights:

In recent weeks, we recommended selling put options or a combination of selling put options and buying call options to earn premiums to increase capital utilization while potentially meeting the goal of building positions at lower levels. We still believe such strategies are feasible due to the current negative funding rates and options skew indicating a bearish market sentiment. In this scenario, buying expensive short-term put options for downside protection may not be ideal. However, longer-dated out-of-the-money put options can still be used in hedging strategies.

Market News and Highlights:

• AscendEX's hot wallet token was abnormally transferred, causing approximately $77.7 million in losses across the ETH, BSC, and Polygon networks, with $60 million on ETH, $9.2 million on BSC, and $8.5 million on Polygon.

• E-commerce giant Amazon recently invested in Dibbs, an NFT fractional trading platform built on the Wax blockchain, allowing users to trade fractional ownership of sports cards in real-time.
• Ethereum scaling solution Polygon announced the acquisition of zero-knowledge tech developer Mir for $400 million. Mir will be integrated into the existing Polygon ecosystem under the name "Polygon Zero," operating alongside other Polygon solutions including Polygon PoS, Polygon SDK, Polygon Avail, Polygon Nightfall, Polygon Hermez, and Polygon Miden.
• Celer's cross-chain payment network cBridge announced support for BobaNetwork. Users can now conduct fully non-custodial, high-speed, low-cost cross-chain and layer transfers between BobaNetwork, Avalanche, Arbitrum, BSC, ETH, Fantom, Optimism, and Polygon using cBridge 2.0.
• According to Bloomberg analyst Eric Balchunas citing data, there are currently 78 listed crypto funds globally, double that of the same period in 2020, with over 40 ETFs currently seeking registration in the U.S. Eric stated that the assets under management of these 78 crypto funds have reached $66 billion (with Bitcoin funds around $43 billion, Ethereum funds around $19.4 billion, basket/index funds around $1.39 billion, and other category crypto funds around $20 billion). It is expected that the total size of crypto funds will grow to $1 trillion in the next 10 years.
• A new land parcel in Decentraland, "VentureEstates," was sold for over $1 million, ranking as the third highest in history. Currently, the top 3 traded land parcels in Decentraland are: 1. Fashion Street Estate, $2.42 million (618,000 MANA), 2. BookLocal- Hotel Booking, $1.08 million (210,000 MANA), 3. VentureEstates, $1.03 million (300,000 MANA).
• According to a report by The Economist, U.S. crypto firms collectively spent over $5 million on lobbying U.S. Senate officials in the first 9 months of 2021, with over $2.5 million spent just in the third quarter, a 4x increase from the same period last year. Coinbase led the spending, shelling out $625,000 in the third quarter to strengthen ties with U.S. Senate officials.
• Reuters reported that Indian Prime Minister Modi will make the final decision on the regulatory framework for cryptocurrencies. Additionally, the Indian government is discussing how to regulate NFTs. Due to concerns about the impact of new regulations, many Indian exchanges planning to launch NFT markets have delayed their plans.

Traditional Financial Markets

Major U.S. indices rose again last week to near historical highs, with the S&P 500 closing at 4,712.02, up 3.82%. Analysts noted that the impact of the OMICRON variant on the economy may not be as severe as previously anticipated. China's A-share market also saw an uptrend with the CSI 300 closing at 5,055.12, up 3.14% last week.

About Amber Group

Founded in 2017, serving major institutions across Asia, Europe, and the Americas, Amber Group has provided crypto financial services to over 800 renowned institutional clients. With a total trading volume exceeding $800 billion on over 100 exchanges, and assets under management surpassing $4 billion, Amber Group helps clients manage risks associated with various crypto assets, offering flexible investments and maximizing returns to optimize long-term value.

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