As we closed the month of September, the crypto market has demonstrated a rather unimpressive performance. This analysis is based on a series of posts on the social media platform X, formerly known as Twitter, by Reflexivity Research, a boutique crypto research firm. Their research, fueled by VeloData, delves into various aspects of the crypto market’s performance, including centralized exchange volumes, implied volatility, and open interest.
Centralized Exchange Volumes in Decline
One of the key takeaways from Reflexivity Research’s analysis is the consistent drop in centralized crypto exchange volumes. This decline is reflective of the downturn in on-chain volumes, liquidity, and even social and Google search trends related to Bitcoin and other cryptocurrencies.
Reduced Expectations for Price Movements
Another significant point made by Reflexivity Research is the downward trend of Deribit’s implied volatility index. The research firm interprets this as an indication of reduced expectations for significant price movements in the crypto market in the foreseeable future.
Decline in Futures Open Interest
The research thread further points out that after the massive open interest wipeout that took place last month, futures open interest has continued to dwindle. This is evident in the chart of Bitcoin’s USD-denominated open interest, with the open interest for Bitcoin CME futures also showing a similar declining trend.
The analysis also notes a decrease in US-driven demand for Bitcoin, which was a significant driver of Bitcoin’s price action in late Q2 and early Q3. This demand has now fallen below the cumulative return of APAC trading hours over the last six months.
Reflexivity Research mentions that the GBTC discount to net asset value (NAV) has slightly rolled over in the past month but has closed in significantly year-to-date. The current GBTC discount to NAV stands at 23%. They also highlight that the SEC has just 15 days left to decide on how to respond to Grayscale’s win regarding their initial denial to convert to a spot ETF, which they suggest is a crucial point to monitor.
Despite the overall lackluster performance of the crypto market in September, Reflexivity Research observes some pockets of idiosyncratic bidding for select mid-large cap altcoins, with Maker (MKR) and Chainlink (LINK) standing out. This is likely due to the success of CCIP and the upcoming SmartCon conference on 2 October.
In summary, September was another uneventful month for the crypto markets, characterized by declines in liquidity, volatility, open interest, and volume. However, it’s worth noting that there have been pockets of idiosyncratic outperformers for savvy market participants.
For those interested in keeping a close eye on the crypto market performance in September and beyond, the cryptoview.io application could prove to be a valuable tool. It provides a comprehensive view of the crypto market, allowing users to track market trends and make informed decisions.
