Zcash Thrives as Market Fear Hits 3-Month Peak: Crypto Diary Americas

Crypto market sentiment remains unsettled following bitcoin’s BTC$108,135.44 quick reversal of the early Tuesday spike to $114,000, and most altcoins mimicked the pop and drop. The CoinDesk 20 Index is little changed over 24 hours even as gold’s rally stalled, raising hopes of rotation into digital assets.

The two-way price action liquidated crypto futures bets worth $600 million. According to CryptoQuant, this represents a three-sigma liquidation event: The liquidation volume was three standard deviations away from the average, marking it as an extreme outlier and an indicator of heightened volatility.

Meanwhile, the ratio of open interest (OI) in bitcoin options to futures OI rose to the highest level since late 2023. That’s typically a sign amplified price swings are in the offing. Additionally, bitcoin’s 30-day implied volatility indices, BVIV and DVOL, remain elevated (check the Technical Analysis section), sustaining the gains seen following the Oct. 10 crash and underscoring the lingering uncertainty.

“Such fluctuations do not contribute to improving the mood of crypto investors,” Alex Kuptsikevich, the FxPro chief market analyst, said in an email.

The lingering nervousness, reflected in the Crypto Fear & Greed index’s drop to 25, could be a good entry point. “At current levels, the rule of ‘buy when everyone is afraid’ may work, or there may be a switch to a more intense sell-off after three months of stagnation,” he said.

In other news, Japan’s newly elected Prime Minister Sanae Takaichi is said to be preparing an economic stimulus package that exceeds last year’s $92 billion to help households tackle inflation. The move is seen as adding to BTC’s upward trajectory by observers including Arthur Hayes, CIO of Maelstrom Fund.

In industry news, the WSJ said crypto trading firm FalconX is acquiring ETF manager 21Shares, and the combined firm will develop funds focused on derivatives and structured products. A Bloomberg report noted that some of Asia’s biggest stock exchanges have grown averse to digital asset treasury firms.

As for traditional markets, the dollar index held on to weekly gains and gold fell for the second day, nearly testing the $4,000 per ounce price mark. Stay alert!

What to WatchFor a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.

• Crypto
  • October 22, 11 am: Circle is hosting a virtual seminar on Zoom called “Inside the Circle Payments Network (CPN)” to explain how financial institutions can leverage CPN for fast, compliant stablecoin settlements.
  • October 22: David Sacks, White House AI and Crypto Czar, meets with Republican Senate Banking Committee members to discuss advancing crypto market structure legislation.
  • October 22: Two industry roundtables on crypto regulation at the US Senate, one hosted by Democratic Senator Kirsten Gillibrand and one hosted by Republican Senator Tim Scott.
  • October 22: Zilliqa (ZIL) will activate its mainnet upgrade, Zilliqa 2.0, with a hard fork at block 11,998,800.
• Macro
  • October 22, 8 am: Mexico Aug. Economic Activity. YoY Est. -1%, MoM Est. 0.1%
• Earnings (Estimates based on FactSet data)
  • October 22: Tesla (TSLA), post-market.

Token EventsFor a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.

• Governance votes & calls
  • Lido DAO is voting to let the Lido Ecosystem Foundation lead all stETH and wstETH bridge partnerships, with a new bridging security committee empowered to veto risky deals and the DAO retaining final oversight. Voting ends Oct. 22.
• Unlocks
  • October 22: Scroll (SCR) to unlock 43.42% of its circulating supply worth $13.56 million.
  • October 22: MultiBank Group (MBG) to unlock 11.97% of its circulating supply worth $16.31 million.
• Token Launches
  • October 22: Turtle (TURTLE) to be listed on Binance.
  • October 22: KTA$0.4761 to be listed on Coinbase.

ConferencesFor a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.

• Day 2 of 2: Zebu Live (London)
• Day 1 of 2: London Blockchain Conference

Token TalkBy Oliver Knight

• ZEC$276.31 continued its ascent on Wednesday, leading the otherwise weak altcoin market with a 9.2% move to the upside over 24 hours.
• The privacy token is now up a staggering 461% in the past month and continues to hit record highs.
• The catalyst behind ZEC’s rise is boosted sentiment around the growth of shielded tokens, which currently account for 27.5% of the total supply.
• Shielding is a privacy mechanism that masks transactions. Shielded tokens must be held in a non-custodial wallet, in other words not an exchange.
• With so much supply held in private wallets, the premise is that sellable supply is constricted.
• Couple a reduction in supply with surging demand and this is the result: A relentless rally to the upside that has outperformed almost every crypto token in circulation.
• ZEC’s gain has been a rare sign of optimism over the past few weeks as several other tokens have plummeted to multimonth lows.
• ASTER, which was often dubbed the plat du jour in September, sank below $1.00 on Tuesday to compound a 33% slide over the past week.
• Recently issued plasma XPL$0.3786 tokens have also found themselves on the sell-side of order books, with demand and hype quickly fading resulting in a 25% drawdown in the past seven days.

Derivatives Positioning

• ZEC$276.31 futures open interest (OI) has surged 22% to $303 million in the past 24 hours, leading growth in select few major coins such as ENA, BCH, HYPE, ADA, AVAX and BTC.
• Futures tied to LINK, XPL and PUMP experienced capital outflows, reflecting heightened investor risk aversion amid volatile market swings.
• Annualized perpetual funding rates for most major cryptocurrencies, including BTC and ETH, remain close to zero, indicating a balanced derivatives market.
• BTC’s order book heat map showed a cluster of sell orders around $111K in the Binance-listed BTC/USDT perp.
• On the CME, OI in ether futures hit a record 2.43 million ETH, with OI in options steady near the lifetime peak of 297K ETH. BTC, however, continued to lag in terms of futures OI, which held at roughly 142K, significantly lower than the peak of over 200K late last year. The divergence points to institutional investors’ preference for ETH over BTC.
• On Deribit, flows featured short strangles and call overwriting strategies in BTC, with some demand for puts as protection against deeper slides. In ETH’s case, the focus was near-dated put spreads and calendar spreads, according to Wintermute.
• In BTC’s case, puts are traded at a premium to calls across all tenors. However, TH options exhibited bullishness beyond the December expiry.

Market Movements

• BTC is down 2.59% from 4 pm ET Tuesday at $108,002.87 (24hrs: -0.51%)
• ETH is down 3% at $3,838.34 (24hrs: -0.98%)
• CoinDesk 20 is down 3.3% at 3,549.42 (24hrs: -0.78%)
• Ether CESR Composite Staking Rate is down 1 bp at 2.83%
• BTC funding rate is at 0.0036% (3.9946% annualized) on Binance

• DXY is unchanged at 99.01
• Gold futures are down 0.7% at $4,080.50
• Silver futures are unchanged at $47.69
• Nikkei 225 closed unchanged at 49,307.79
• Hang Seng closed down 0.94% at 25,781.77
• FTSE is up 0.75% at 9,497.77
• Euro Stoxx 50 is down 0.35% at 5,667.02
• DJIA closed on Tuesday up 0.47% at 46,924.74
• The S&P 500 closed unchanged at 6,735.35
• The Nasdaq Composite closed down 0.16% at 22,953.67
• The S&P/TSX Composite closed down 1.73% at 29,888.82
• S&P 40 Latin America closed down 1.24% at 2,880.55
• US 10-Year Treasury rate is unchanged at 3.955%
• E-mini S&P 500 futures are unchanged at 6,775.50
• E-mini Nasdaq-100 futures are down 0.15% at 25,257.50
• The E-mini Dow Jones Industrial Average Index is unchanged at 47,133.00

Bitcoin Stats

• BTC Dominance: 59.75% (unchanged)
• Ether-bitcoin ratio: 0.03568 (-0.21%)
• Hashrate (seven-day moving average): 1.107 EH/s
• Hash price (spot): $46.57
• Total fees: 2.95 BTC / $324,895
• CME Futures Open Interest: 142.385 BTC
• BTC priced in gold: 25.7 oz.
• BTC vs gold market cap: 7.26%

Technical AnalysisBTC 30-day implied volatility indices, DVOL and BVIV. (TradingView)

• BTC’s 30-day implied volatility indices, DVOL and BVIV, have surged past their respective 200-day simple moving averages for the first time since April.
• These breakouts indicate expectations for increased price turbulence over the next four weeks.

Crypto Equities

• Coinbase Global (COIN): closed on Tuesday at $338.62 (-1.5%), -2.02% at $331.78 in pre-market
• Circle Internet (CRCL): closed at $129.85 (-0.73%), -1.34% at $128.11
• Galaxy Digital (GLXY): closed at $42.86 (+8.1%), -5.27% at $40.60
• Bullish (BLSH): closed at $57.27 (-2.54%), -2.97% at $55.57
• MARA Holdings (MARA): closed at $20.07 (-3.18%), -2.64% at $19.54
• Riot Platforms (RIOT): closed at $20.67 (-6.09%), -2.9% at $20.07
• Core Scientific (CORZ): closed at $19.23 (+2.23%), -2.18% at $18.81
• CleanSpark (CLSK): closed at $18.77 (-7.99%), -3.89% at $18.04
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $56.01 (-6.29%), -4.77% at $53.34
• Exodus Movement (EXOD): closed at $24.68 (-5.55%)

Crypto Treasury Companiesat

• Strategy (MSTR): closed at $301.91 (+1.79%), -2.29% at $295.00
• Semler Scientific (SMLR): closed at $23.51 (-0.59%)
• SharpLink Gaming (SBET): closed at $14.34 (-3.04%), -2.51% at $13.98
• Upexi (UPXI): closed at $5.09 (-11.01%), -3.54% at $4.91
• Lite Strategy (LITS): closed at $1.95 (-1.52%)

ETF FlowsSpot BTC ETFs

• Daily net flows: $477.2 million
• Cumulative net flows: $61.94 billion
• Total BTC holdings ~1.35 million

Spot ETH ETFs

• Daily net flows: $141.7 million
• Cumulative net flows: $14.61 billion
• Total ETH holdings ~6.74 million

Source: Farside Investors

While You Were Sleeping

• Crypto Trading Firm FalconX to Buy ETF Manager 21Shares (WSJ): Digital asset prime broker FalconX agreed to acquire crypto asset manager 21Shares for an undisclosed amount.
• Kadena Foundation to Cease Operations, Leaving Blockchain to Run Without Core Team (CoinDesk): Harsh market conditions and a depleted funding runway made continued development untenable, prompting a wind-down and a handoff of maintenance to community developers.
• Hong Kong’s Securities Regulator Approves First Solana ETF (CoinDesk): ChinaAMC’s Solana ETF will list in Hong Kong on Oct. 27 in HKD, RMB and USD, while a US count erpart faces delay after an SEC slowdown tied to the federal government shutdown.
• Japan’s New PM Is Preparing Large Economic Stimulus to Tackle Inflation, Sources Say (Reuters): A package above 13.9 trillion yen ($92 billion) would scrap a gasoline surtax, expand grants for smaller firms and seed artificial intelligence and chip projects.
• London Gold Association Calls for City to Revive Plans for Futures Contract (Financial Times): Peter Zoellner, the new chair of the London Bullion Market Association, championed an exchange-listed bullion derivative in London to spread liquidity and lessen reliance on US platforms