Crypto Daybook Americas: BTC Hits Mid-Cycle Peak as Retail Interest in Altcoins Soars

Your day-ahead look for Dec. 9, 2024

Updated Dec 6, 2024, 12:59 p.m. UTCPublished Dec 9, 2024, 12:00 p.m. UTC

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By Omkar Godbole (All times ET unless indicated otherwise)

The crypto market has begun the week on a negative note, with bitcoin (BTC) lower after a weekend spent wrestling with the $100,000 mark amid reports that Amazon shareholders are pushing for an allocation to the cryptocurrency. The persistent indecisiveness since Dec. 5 amid increased retail participation has some indicators pointing to a mid-bull cycle top.

For example, BTC's value days destroyed (VDD) indicator, a velocity gauge, has jumped to 2.0 from 0.5, signaling that older coins are being sold. As the founder of 10x Research, Markus Thielen, points out, "This often reflects profit-taking by long-term holders, a behavior typical in the later stages of a bull market." Luckily for the bulls, VDD is still below the critical 3.8 level, marking the end of previous bull markets. The popular MVRV ratio supports this idea, rising to 2.7x in a move Thielen calls a hint of a mid-cycle peak where many investors contemplate taking profits.

Meanwhile, MicroStrategy's CEO Michael Saylor faced a backlash on social media for urging the U.S. to replace gold with BTC in its reserves, leaving America's enemies with a worthless asset. At least that's an improvement compared with the maxi narrative of late 2020 that suggested BTC would replace the USD, or is it? The cheesy take has some wondering whether the bullish cycle is about to peak.

Ether is also feeling the pressure, posting even larger losses than bitcoin and dampening hopes for a recovery in the ether-bitcoin ratio. Despite this, retail interest remains robust, with open interest in ETH perpetuals rising to $843 million on leading decentralized exchange Hyperliquid, exceeding BTC's $616 million. This follows record inflows of $836 million into ether ETFs last week.

"This indicates significant retail interest in ETF flows," said Toe Bautista, a research analyst at GSR. "Most carry trades are on CME versus Hyperliquid, so this interest seems to reflect sticky retail capital that could fuel the next leg up."

On a positive note for ETH, the DeFi sector, which primarily operates on Ethereum, is booming. Last week, TradingView's DeFi market cap index surged over 28% to $151.9 billion, its highest since early 2022. This increase has reduced ether's inflation rate to 0.3% and was accompanied by a 71% rise in DEX trading volumes, a 39% increase in network revenue and a 20x surge in total blob fees.

Frax Finance’s FXS token fell despite an expected major upgrade announcement, while Aptos’ APT token dropped 7% ahead of a $165 million token unlock on Dec. 11. Altcoins are gaining increased search interest on Google, as shown in today’s chart.

In traditional markets, U.S. equity futures held steady, with China’s Politburo announcing more proactive fiscal and loose monetary policies, prompting the 10-year Chinese government bond yield to drop below 2%. (Are bonds pricing in a potential Chinese QE?) Stay alert!

What to Watch

• Crypto:
  • Dec. 10, 11:30 a.m.: Microsoft's 2024 Annual Shareholders Meeting. The meeting will include MicroStrategy Executive Chairman Michael Saylor's 44-slide Bitcoin presentation (“Microsoft Bitcoin Strategy”). Microsoft will then disclose the voting results. Livestream link.
  • Dec. 13: The annual Nasdaq-100 reconstitution. Changes to the index, if any, are announced on this day. Nasdaq-listed MicroStrategy (MSTR), the world’s largest corporate holder of bitcoin, is widely expected to be added to the index.
  • Dec. 18: CleanSpark (CLSK) Q4 FY 2024 earnings. EPS Est. $-0.18 vs Prev. $-1.02.
• Macro
  • Dec. 11, 8:30 a.m.: The U.S. Bureau of Labor Statistics (BLS) releases November’s Consumer Price Index (CPI) data.
    • Inflation Rate YoY Est. 2.7% vs Prev. 2.6%.
    • Core Inflation Rate YoY Est. 3.3% vs Prev. 3.3%.
  • Dec. 11, 9:45 a.m.: The Bank of Canada announces its policy interest rate (also known as overnight target rate and overnight lending rate). Est. 3.25% vs Prev. 3.75%. A press conference starts at 10:30 a.m. Livestream link
  • Dec. 12, 8:15 a.m.: The European Central Bank (ECB) announces its latest monetary policy decision (three key interest rates).
    • Deposit facility interest rate Est. 3.0% vs Prev. 3.25%.
    • Main refinancing operations interest rate Est. 3.15% vs Prev. 3.4%.
    • Marginal lending facility interest rate Prev. 3.65%.
  • Dec. 18, 2:00 p.m.: The Fed is set to release December's Federal Open Market Committee (FOMC) Statement and interest-rate decision, with the previous rate at 4.75%. The CME Group's FedWatch tool currently indicates that traders in federal funds futures assign a 90.5% probability of a 25 basis-point rate cut being announced, compared to a 9.5% probability of no change.
  • Dec. 18, 2:30 p.m.: Fed Chair Jerome Powell hosts a press conference on the FOMC decision. Livestream link.
  • Dec. 18, 10:00 p.m.: The Bank of Japan (BoJ) announces its interest rate decision.
  • Dec. 19, 8:30 a.m.: The U.S. Bureau of Economic Analysis (BEA) releases third-quarter GDP (final).
    • GDP Growth Rate QoQ Est. 2.8% vs Prev. 3.0%.
    • GDP Price Index QoQ Est. 1.9% vs Prev. 2.5%.
  • Dec. 24, 1:00 p.m. The Fed releases November’s H.6 (Money Stock Measures) report.

Token Events

• Unlocks
  • Bitget to unlock 5.38 BGB, 0.38%of circulating supply, worth $6.81 million at current prices on Dec. 9 at 7 p.m.
  • EigenLayer to unlock 1.29 million EIGEN, worth $5.92 million, on Dec. 10 at 2 pm.

Conferences:

• Dec. 9 - 10: Bitcoin MENA 2024 (Abu Dhabi, UAE)
• Dec. 9 - 12: Abu Dhabi Finance Week 2024 (Abu Dhabi, UAE)
• Dec. 9 - 13: Luxembourg Blockchain Week 2024
• Dec. 12 - 13: Global Blockchain Show (Dubai, UAE)
• Dec. 12 - 14: Taipei Blockchain Week 2024 (Taipei, Taiwan)
• Dec. 13: Limitless Crypto 2024 (San Juan, Puerto Rico)
• Dec. 16 - 17: Blockchain Association’s Policy Summit (Washington)
• Jan. 13 - 24: Swiss WEB3FEST Winter Edition 2025 (Zug, Zurich, St. Moritz, Davos)
• Jan. 17: Unchained: Blockchain Business Forum 2025 (Los Angeles)
• Jan. 18: BitcoinDay (Napes, Florida)
• Jan. 21: Frankfurt Tokenization Conference 2025

Token Talk

PEPE has gained more than 23% in the past seven days, with trading volumes increasing from an average of $2 billion to over $8 billion in that period.

That move made the token the first among the relatively new memes from 2023 — a cohort that includes bonk, dogwifhat, and mog, among others — the first to eclipse a landmark $10 billion market cap

Gains in pepe likely tracked those of ether, which has outperformed bitcoin (BTC) and other major tokens with an 8% rise in the past seven days.

Since late 2023, meme tokens have been increasingly seen as a beta — or a leveraged way to bet on the growth of their underlying blockchain.

Some PEPE whales increased their holdings by roughly 1.1 billion tokens over the weekend, suggesting strong institutional or large investor interest in expectations of a higher move, according to Lookonchain data.

Derivatives Positioning

• Funding rates in perpetual futures tied to major tokens, including BTC, have dropped to less than 30% from nearly 100% last week. It's a sign that speculative excesses have been crowded out.
• While perpetual futures open interest for most major coins has increased over the past seven days, cumulative volume deltas (CVDs) have declined, indicating a net selling pressure.
• BTC's options market has seen a strong uptake for the Dec. 13 expiry call at $105,000 and calls at $130,000 and $150,000 expiring in January and March. Calls continue to trade at a premium to puts.
• In ETH, an entity financed a large purchase of the $3,200 put expiring on Dec. 27 with a short position in the $4,200 call. The positioning shows expectations for a price drop.

Market Movements:

• BTC is down 3.3% from 4 p.m. ET Friday to $98,632.41 (24hrs: -1.46%)
• ETH is down 4.7% at $3,881.34 (24hrs: -2.81%)
• CoinDesk 20 is down 4.1% to 3,838.53 (24hrs: -3.37%)
• Ether staking yield is down 24 bps to 3.05%
• BTC funding rate is at 0.0164% (18% annualized) on Binance

• DXY is down 0.18% at 105.87
• Gold is up 1.49% at $2,677.9/oz
• Silver is up 2.69% to $32.03/oz
• Nikkei 225 closed +0.18% at 39,160.5
• Hang Seng closed +2.76% at 20,414.09
• FTSE is up 0.21% at 8,326.02
• Euro Stoxx 50 is unchanged at 4,974.6
• DJIA closed Friday -0.28% at 44,642.52
• S&P 500 closed +0.25% at 6,090.27
• Nasdaq closed +0.81% at 19,859.77
• S&P/TSX Composite Index closed unchanged at 25,691.8
• S&P 40 Latin America closed -1.62% at 2,329.74
• U.S. 10-year Treasury was unchanged at 4.17%
• E-mini S&P 500 futures are down 0.1% to 6,092.75
• E-mini Nasdaq-100 futures are down 0.19% to 21,615.75
• E-mini Dow Jones Industrial Average Index futures are unchanged at 44,692

Bitcoin Stats:

• BTC Dominance: 55.86% (0.90%)
• Ethereum to bitcoin ratio: 0.03932 (-0.73%)
• Hashrate (seven-day moving average): 745 EH/s
• Hashprice (spot): $62.26
• Total Fees: 15.28 BTC / $2.76M
• CME Futures Open Interest: 195K BTC
• BTC priced in gold: 37.4 oz
• BTC vs gold market cap: 10.66%
• Bitcoin sitting in over-the-counter desk balances: 428.79K

Basket Performance

Technical Analysis

BTC's hourly chart with Bollinger bands. (CoinDesk/TradingView)

• BTC's hourly chart shows the cryptocurrency has dived below the lower Bollinger band, hinting at deeper losses ahead.
• Bollinger bands are volatility bands placed two standard deviations above and below the 20-period simple moving average of the price.

TradFi Assets

• MicroStrategy (MSTR): closed on Friday at $395.01 (+2.23%), down 2.39% at $385.50 in pre-market.
• Coinbase Global (COIN): closed at $343.62 (+7.19%), down 2.4% at $335.4 in pre-market.
• Galaxy Digital Holdings (GLXY): closed at C$29.90 (+8.14%)
• MARA Holdings (MARA): closed at $26.43 (+6.62%), down 2.88% at $25.67 in pre-market.
• Riot Platforms (RIOT): closed at $12.95 (+5.11%), down 1.62% at $12.74 in pre-market.
• Core Scientific (CORZ): closed at $16.99 (+0.30%), down 1% at $16.82 in pre-market.
• CleanSpark (CLSK): closed at $14.97 (+7.47%), down 2.54% at $14.59 in pre-market.
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $30.94 (+7.02%), down 0.94% at $30.65 in pre-market.
• Semler Scientific (SMLR): closed at $61.75 (+5.47%), down 1.31% at $60.94 in pre-market.

ETF Flows

Spot BTC ETFs:

• Daily net inflow: $376.6 million
• Cumulative net inflows: $33.4 billion
• Total BTC holdings ~ 1.103 million.

Spot ETH ETFs

• Daily net inflow: $83.8 million
• Cumulative net inflows: $1.43 billion
• Total ETH holdings ~ 3.280 million.

Source: Farside Investors

Overnight Flows

Chart of the Day

Google search value for the term "altcoins." (Google Trends)

• Google Trends, a widely used tool to gauge general or retail interest in trending topics, is returning a value of over 70 for the worldwide search query "altcoins."
• That's the highest retail investor interest for more than four years.

While You Were Sleeping

• Amazon Shareholders Push for Minimum 5% Bitcoin Allocation (CoinDesk): Amazon shareholders are urging the company to follow MicroStrategy and diversify its reserves into bitcoin to combat inflation and enhance shareholder value. Proponents argue that even a 5% allocation could yield long-term benefits, because bitcoin has significantly outperformed traditional assets like gold and the S&P 500 this year.
• Big Crypto Spent Big Money to Reshape the Political Landscape (CBS News): In an episode of CBS News program “60 Minutes” that aired on Sunday, Ripple CEO Brad Garlinghouse said substantial financial contributions from crypto companies, including Ripple, significantly influenced key Senate races in Ohio, Michigan, and Arizona. Crypto firms contributed a third of all direct corporate donations to super PACs, with 85% of the 29 Republicans and 33 Democrats they supported in congressional races scoring victories.
• Gauging Bitcoin, XRP Resistance Levels After Record Price Rallies (CoinDesk): Bitcoin's options market highlights $120,000 as a potential resistance, with $1.93 billion in open interest, while $200,000 calls hold $500 million. XRP, trading near $2.42, shows $2 million in open interest at the $2.8 strike and $1.12 million at $5.
• South Korea Says Yoon Still Controls Military as Leadership Crisis Deepens (Reuters): South Korean President Yoon Suk Yeol faces a criminal investigation and political crisis after a failed attempt to enact martial law, sparking dissent among military officers and his own party. Despite surviving an impeachment vote on Saturday, Yoon's future remains uncertain as opposition calls for his resignation and prosecution grow.
• Radiant Capital Says North Korean Hackers Behind $50 Million Attack in October (CoinDesk): Radiant Capital linked a $50 million exploit in October to a North Korean hacking group called UNC4736. The attackers, posing as a former contractor, deployed malware to access private keys.

In the Ether

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.

Shaurya Malwa

Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia with a focus on crypto derivatives, DeFi, market microstructure, and protocol analysis. Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, ZIL, KSM, ENJ, CKB, JOE, GHST, PERP, BTRFLY, OHM, BANANA, ROME, BURGER, SPIRIT, and ORCA. He provides over $1,000 to liquidity pools on Compound, Curve, SushiSwap, PancakeSwap, BurgerSwap, Orca, AnySwap, SpiritSwap, Rook Protocol, Yearn Finance, Synthetix, Harvest, Redacted Cartel, OlympusDAO, Rome, Trader Joe, and SUN.