Welcome to the weekly Ouroboros Flows and Positioning Chartbook, a weekly compendium dedicated to providing a balanced view of the most noteworthy charts. None of the following is financial advice.
The Flows & Positioning chartbook is back after a 3 months hiatus. During this hiatus, we've reformatted the chartbook to be more organized with a conclusion upfront followed by all of the charts we've reviewed in totality.
The View: We are bullish and think this could be the turning point for alts. This recent Tues (14 May) was the first time we've seen a conducive CPI print after 4 hot prints. This sets the market up well for upside in the next good 2 weeks before 31 May's Core PCE print. That said, we continue to advocate selective picking of alts as we've noticed in recent months a growing dispersion in performance across alts. A number of alts - old DeFi, metaverse, some L1s (eg. SEI/SUI) - have struggled to post a significant bounce despite the market's recent bid. In fact, many of these have only had down only charts past 6 months despite BTC making new highs in the same period.
Coins We Like: We like $FTM, $NEAR, $CHZ, $RLB, $ETC here. - $FTM (Sonic) - $NEAR (A.I.) - $CHZ and $RLB (Euros 2024 + Copa America + CHZ Dragon8 Upgrade) - $ETC (ETH Beta + Halvening)
TradFi Macro
We think the recent sanguine US inflation print could reverse the trend on crypto. At the start of the year, the market was willing to shrug off bad inflation prints given the BTC ETF catalysts. However, post the BTC ETF and after 4 bad prints, the market panicked and sold off. We think this recent positive print and the lack of another inflation indicator till month end, sets the stage up for a near-term rally. A potentially longer term rally as well if the inflation trend stays controlled.
Think the lows are in. US2Y tried pushing past 5% into the recent FOMC but the Fed's persistent dovish messaging has seen it retrace. Don't see the US2Y revisiting 5% anytime soon unless we have another hot CPI print.
US10-US2 coming off alongside US2Y being directionally down suggests that the macro community is less concerned now with inflation being sticky and is now more pro-risk.
S&P resumed its uptrend post global liquidity's decline stopping. Crypto could follow suit.
US M2 YoY, an indicator with high signaling to tops and bottoms is still up.
Crypto Macro
BTC dominance approaching the highs again. Prior new highs has been a signpost to alt szn.
Stablecoins market cap just hit in a new high. Capital is still flowing into crypto.
Since mid-Mar stablecoin dominance has been rising (risk-off), this is now coming off again. For a sustained risk-on, we'll need to see continuation of this.
The bid from $60K is still spot driven with funding rates still below neutral. A healthy/not too speculative rally suggesting more room for upside.
Flows and Positioning
Similarly for SOL. Despite being a large cap coin and one of the outperformers during this rally from $60K, the rally has been driven also by spot bids. Funding is way below neutral as well (could be attributed to hedging from FTX estate sale).
Alt coin open interest in $ still at range lows despite alt coin market cap at mid of range, ie. open interest in contracts still at the lows.
Alt coin funding rate still below neutral.
Speculative positioning in TradFi (CME futures) mid of the range. Not too high but also super light as well.
Options
Options participants turning bullish again. Significant call buying activity across 24 May, 7 Jun and end-Dec.
Vol is still cheap, at low end of the range.
BTC puts still cheap. 25D skew at the low end.
BTC front-end is still cheap. Options traders feel more certain about further out prices than nearer term. Good opportunity to buy some front-end puts if you are near term bearish.
ETH ATM implied vol increasing since last week. Perhaps due to us approaching key ETH ETF dates.
ETH puts still cheap.
ETH front-end is still cheap. Options traders feel more certain about further out prices than nearer term. Good opportunity to buy some front-end puts if you are near term bearish.
BTC On-Chain Metrics
MVRZ z-score now at 2.31. Market tends to peak above 6.5 z-score
Small holders send into exchanges (zoomed out). Pico tops and bottoms tend to be marked by large volume of sends into exchanges followed by a reduction in sends.
Small holders send into exchanges (zoomed in). Noticed a reduction in sends into exchanges by small holders in recent weeks.
Large holders send into exchanges (zoomed out). Pico tops and bottoms tend to be marked by large volume of sends into exchanges followed by a reduction in sends.
Large holders send into exchanges (zoomed in). Similar to small holders; noticed a reduction in sends into exchanges by large holders in recent weeks.
BTC Miners
Miners continue to sell.
Protocols / Chain Metrics
Most stables inflows going into Arbitrum, Base, Optimism.
L1 Tracker DAUs
L1 Tracker Dex Volumes (7D)
L1 Tracker Txn Activity (7D)
L1 Tracker TVL (7d)
L1 Tracker DAUs (1M)
L1 Tracker (Daily Txns) 1M Chg
Commits (1M Chg)
Protocol TVL 7D Chg
DEX Trading Volume 7D Chg
Protocol Fees 7D Chg
Protocol Revenue 7D Chg
Protocol Active Users 1W Chg
Bridge Deposits 1W Chg
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