Market Update: 30 Mar 2023


We are through the first quarter of 2023 now and what an eventful quarter it’s been.

Particularly for BTC which had been moving into the shadow of ETH for the good part of the last two years. Barring a major surprise tomorrow, BTC would have gained 70+% for the quarter, its best quarter since Q1 2021 (Chart 1).

Chart 1

BTC started climbing from Day 1 of 2023 (which is also the low of the year) and was turbo charged by the problems in the US financial system this month, which we wrote about in brief ( and will cover in much more detail in next week’s release of the 6th edition of our quarterly Just Crypto publication.

Tomorrow’s large quarter-end option expiry is unlikely to provide the fireworks that other march quarter-ends have done in recent years. The speed of the recent spot move and lack of traders’ conviction have left the open interest map spread rather thinly across strikes (Chart 2).

Chart 2

We are positioning ourselves short vol into tomorrow’s expiry, expecting sellers to come in ahead of the big expiry roll tomorrow, and before buyers step in again next week.

Markets have largely brushed off the CFTC-Binance civil suit and we tend to agree. It is likely go the same way as a suit against Bitmex a few years back where a large settlement was reached to conclude the affair.

In any case, the multiple open US government vs. Crypto lawsuits are almost impossible for markets to price or time, and we believe markets will only react once the final decision is imminent.

What matters more in the near-term will be data coming out of the US, which we expect will finally start showing sure signs of a slowdown, beginning as early as next week.

How BTC will perform in the coming US recession to come is the biggest question mark for us – with a recession so far an unproven event in BTC’s short 14 year history.

Price-wise all the easy work is now done, and we have gotten to the hard work zone for bulls.

Firstly, Q2 tends to be a difficult quarter for risk markets, crypto notwithstanding.

And BTC has finally reached the lower-end of our long-term resistance zones.

This zone of multiple thick resistance levels extends from the 23.6% Fibonacci retracement at 28k all the way to the 39.2% Fibonacci retracement just above 35k (Chart 3).

Chart 3

ETH looks decidedly less bullish than BTC, and continues trading in its consolidation triangle, with the top of the triangle coming in around last week’s 1880 high (Chart 4).

Chart 4

We like selling ETH calls at these levels, especially the 1 month 1900 strike, and 3m 2000 and 2200 strike.

Looking past quarter-end, we have a busy month ahead data-wise. Starting from next week, these economic data releases will likely drive the next directional leg for BTC/ETH spot and vol.

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