It's Raining Record Highs

Bitcoin's Rising Open Interest Doesn't Imply Correction

The latest moves in crypto markets, in context Edited by Omkar Godbole November 1, 2021 Sponsored by     Bitcoin (BTC) +2.6%  $62,000 Ether (ETH)  +4%  $4,350 (Price data as of November 1 @ 12:20 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.  Good morning, Here's what's happening this morning: Market Moves: Bitcoin Sees Record Monthly Close Technician's Take: Bitcoin Leads Action in AUD/JPY And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time.  Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:   Top Gainers: The Graph (GRT): +10% Polkadot (MATIC): +9% Filecoin (FIL): +6% Top Losers:  There are no losers in CoinDesk 20 today.  The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges. A message from Bybit What if you could win 0.1 BTC or 1 ETH from performing trades? At Bybit, we value our traders — and we show it. Join us, make a first deposit and trade at least $100,000 in Spot and Derivatives combined and you may be one of more than 80 lucky winners! Event ends Nov. 18, 2021, 10AM UTC. T&Cs apply. More than three million traders have experienced Next Level Trading. What about you? Market Moves by Omkar Godbole It's raining record highs in risk assets even as bond markets and interest rate futures price in the faster unwinding of stimulus by the Federal Reserve (Fed).    The S&P 500, Nasdaq, and Dow Jones Industrial Average finished October at lifetime highs, recording their biggest monthly gains in a year. Bitcoin chalked up a 40% rally last month, hitting a new high of $66,975. Ethereum's ether token and coins like dog-themed shiba inu and Decentraland's metaverse token MANA also set new price peaks last week.    The action may indicate investor confidence that the Fed and other central banks will largely keep the policy accommodative – liquidity tap flowing – to avoid asset price deflation. The Fed is widely expected to announce the beginning of the unwinding of its crisis-era $120 billion-a-month asset purchase program later this week.  Rising Open Interest Does Not Imply Correction Bitcoin futures open interest (Source: Glassnode) The amount of dollars locked in bitcoin futures contracts trading on major exchanges is nearing record highs around $27.5 billion reached in April. A high level of open interest is widely taken to represent excess leverage and often portends correction.    However, this time may be different, as bitcoin's use as collateral in the derivatives market has declined over the past several months.   "The difference between now and April (previous OI all-time-high) is that the percentage of open interest holding BTC as collateral has decreased from 70% to 45% approximately," Marcus Sotiriou, sales trader at the U.K.-based digital asset broker GlobalBlock, told CoinDesk. "If bitcoin is being used as collateral, there will be an increased chance of a mass-liquidation event, as the price drops lower in tandem with long trading positions." Read: Bitcoin Eyes Fed Meeting After Biggest Monthly Price Gain Since December 2020 Technician's Take by Omkar Godbole BTC a Lead Indicator for AUD/JPY? Bitcoin seems to be evolving into an advanced indicator for AUD/JPY traders.    The chart below shows bitcoin bottomed out and began rising four weeks before AUD/JPY carved out a bottom in mid-August this year, repeating the pattern observed in September-October 2020.   The currency pair peaked in mid-May or four weeks after bitcoin topped out in mid-April.  Bitcoin and AUD/JPY daily charts (Source: TradingView) A Message from Chainalysis Looking for your ticket #ToTheMoon? 🚀   Market Intel by Chainalysis - the blockchain data platform - arms you with the most complete on-chain dataset for crypto research and investment decisions.   Whether you're an Asset Manager searching for a signal...   A Quant Analyst interested in spotting market trends...   Or a VC looking to fund the next emerging crypto player...   Market Intel will help you reach your goals, utilizing 53 metrics across 10 categories—like whales, exchanges, liquidity, and supply. To get started, head to markets.chainalysis.com. BOLO Be on the lookout for the following events today: 14:00 UTC (10:00 a.m. ET): U.S. ISM Manufacturing PMI (Oct), Est: 60.5 ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:   Facebook Changes Corporate Name to 'Meta,' Investment Firm Andreessen Horowitz Calling for a Better Internet   "First Mover" hosts react to Facebook's announcement of its corporate name change to "Meta" in anticipation of the next-generation internet. Meanwhile, investment firm Andreessen Horowitz (a16z) outlines vision on Web 3 in a letter "We Deserve a Better Internet." Tomicah Tillemann, Global Head of Policy at Andreessen Horowitz, shares insights into the topic. Plus, markets insights from MarketGauge Managing Director Michelle Schneider and details on Nigeria's CBDC rollout from Bitt CEO Brian Popelka.  A Message from CoinDesk What will 2022 bring? Crypto 2022 is CoinDesk's ambitious effort to scope out what's next. This week it's Policy Week, a week devoted to exploring the complex ways governments are interacting with the cryptocurrency ecosystem, and how policy decisions or lack thereof will affect the year ahead. Read more here. Latest Headlines The Bias That Propels Shiba Inu and Dogecoin A coin with a lower per-unit price can make novice investors feel a little richer. Here's Why a CryptoPunk Sold for $530M A half-billion-dollar NFT "sale"? On-chain analysts say it may have just been an elaborate publicity stunt. 4 Reasons Not to Invest in Bitcoin Futures ETFs                  There are better ways to participate in the bitcoin movement. Burger King to Give Crypto Rewards With Robinhood Burger King's Royal Perks users who spend more than $5 on the chain's app will be rewarded with one coin from a pool of either 20 BTC, 200 ETH or 2 million DOGE. Ant Group, Tencent, JD.com Sign NFT 'Self-Regulation' Convention Chinese tech giants are likely working to appease regulators. Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.  First Mover A newsletter from CoinDesk Copyright © 2021 CoinDesk, All rights reserved.  250 Park Avenue South New York, NY 10003, USA Manage your newsletter subscriptions  |  Unsubscribe from all CoinDesk email