🧘♂️ALERT: Crypto Dip, Explained
Market Meditations | November 26, 2021
The What, How and Why
Dear Meditators
We have a lot to be thankful for but the crypto markets are not part of it today.
Today’s Meditations:
Important Crypto Headlines
BTC Fundamental and Technical Update
Crypto Derivatives Market Analysis
Podcast with Founder of Moonbeam
Hot New NFTs
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? Top Crypto Headlines
Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool.
✅ Remember, There’s no COVID in the Metaverse
BTC/USD
The financial and crypto markets are a sea of red today.
A day like this reinforces the importance of fundamental updates.
A new coronavirus variant has been detected in Hong Kong and South Africa. So far, this appears to be vaccine resistant. Should this be confirmed, it seems more probable that we will see national lockdowns once more. Lockdowns impact corporate cash flows and the overall health of the economy.
Unsurprisingly, this has created a risk-off sentiment in both the stock markets and the crypto markets. A nervousness and lack of risk appetite has materialized through sell pressure.
We approach a key structural level at $54k. This is very important for the market structure and is confluent with the 0.5 fibonacci level. Should we lose this level, it wouldn’t be unsurprising to see us go to $50k. And as BTC goes down, it’s likely other crypto assets will be impacted.
On the flip slide, there is a key psychological level at $60k that we need to get above. We’d like to reclaim this level to resume Bull Market 2.0, rather than a bearish market or a crab style market that moves sideways. Remember, we are still in a macro uptrend.
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? Putting Up with Calls
Approximately 51,900 crypto options contracts worth almost $3 billion are set for expiry today. The vast majority of these were set to be settled by Deribit at 8:00am UTC.
The price of puts, derivatives betting on bearish price action, rose earlier this week, revealing a developing bearish sentiment.
The three-month put-call skew (measuring the relative cost of puts to calls) turned positive, hitting a 6-week high this week of 3% according to Skew.
Most of the open interest laid in call options at prices above BTC’s all-time high.
Rising prices for put options indicate rising demand. With more buyers competing to put in orders for puts, it seems that options patrons expected the Bitcoin price to fall as we approached today’s expiry date.
❓Max Pain Price
The max pain price, or the price at which options buyers stand to suffer the most losses upon expiration stands at $58,000. A theory surrounding this price suggests price action is manipulated by whales and large institutions to maintain a certain level to cause maximum losses to derivatives buyers.
Today’s options expiry will either lend some credibility to the max pain price theory if bitcoin remains pegged to the $58,000 level or validate consumer interest in lowering BTC price should we see a dump lower ahead of options expiration.
Regardless of whether adding downside protection, or counting on a BTC discount, options expiration continues to be a metric worth noting when trying to anticipate market moves.
? How to Profit from a Multi-Chain Future with Derek Yoo
Derek is co-founder of PureStake, the company behind both the MoonRiver and MoonBeam smart contract networks. Before crypto, Derek co-founded Fuze, a cloud communications company valued at over $1.4bn in 2017.
? Intergalactic Crypto Wars
A new world is forming, where space heroes from planets like Bitcoione, Cardaggar, and Avalanye will battle for domination.
Sidus Heroes, developed by NFT Stars, initially launched as a collection of 6000 space-hero-themed NFTs on Ethereum. Not only did they consult with dozens of artists, but they gathered more than 100 engineers, programmers, and DeFi specialists in their quest to combine P2E gaming with a DAO, yield farming, and the metaverse. Their goal was to create the first AAA game using WEBGL technology for another play-in-browser experience.
Owners of the original NFT collection can participate in royalties from the secondary sales market, by holding a specified amount of one of two tokens in their MetaMask with the SIDUS Hero card. Upgraded Heroes earn more than regular Heroes.
You can also stake your NFT on the Sidus Heroes website to earn NFTS tokens.
Original holders will have earlier access to the Beta launch of the game but if you cannot score an original, you can purchase an Academy NFT, which grants you access to the game but no royalty or farming rights.
There is no way to know how many of these games will be successful, or how many metaverses there will be in the long run, but this narrative is especially hot right now.
You can read what Cointelegraph had to say about SIDUS here.
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??♂️✍️ Stories in this newsletter were written by D. Beverly, Kyle F., Max P., Nick T., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.
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