Daily Outlook: Crypto Market Reaches Balance

The crypto market was little changed throughout the day, with the CoinDesk 20 Index (CD20) down just 0.35%. Bitcoin fell nearly 0.6% in 24 hours to settle around $66,000. The biggest gainer among crypto majors was XRP, which rose more than 4.5% to above 64 cents, the highest level since March 25. The rally comes amid growing hopes for new token unlocks and a resolution to a long-running SEC-Ripple lawsuit. According to the filing published yesterday, the SEC is expected to drop its complaint against crypto exchange Binance. The commission is also expected to honor “Third-Party Crypto Asset Securities.”

Spot bitcoin (BTC) and ether (ETH) exchange-traded funds (ETFs) listed in the US have started recording outflows, erasing gains made ahead of Republican candidate Donald Trump’s speech last week. Spot bitcoin ETFs witnessed net outflows of $18 million, breaking a four-day streak of inflows reaching as high as $124 million. Grayscale’s IBIT led the way with outflows of $73 million. Products from Fidelity, Ark Invest, Bitwise and VanEck saw outflows ranging from $2 million to $7 million, according to SoSoValue data. BlackRock’s IBIT was the only ETF to record inflows of around $75 million. On the other hand, ether-backed ETFs got off to a dismal start yesterday with net outflows of around $100 million, extending the losing streak to four days.

Nvidia is likely to see more significant price swings than bitcoin and ether in the near future. According to Fintel, NVDA’s 30-day implied volatility, a gauge of expected price swings over four weeks, recently rose to 71% on an annualized basis from 48%. Deribit’s bitcoin DVOL index, a measure of its 30-day implied volatility, fell to 49% from 68%, according to charting platform TradingView. The ETH DVOL index fell to 55% from 70%. NVDA, a bellwether for artificial intelligence, has emerged as a sentiment gauge for both the equity and crypto markets. Both bitcoin and NVDA bottomed in late 2022 and have maintained a strong positive correlation since then. The 90-day correlation between bitcoin and NVDA is currently 0.73.

The number of active XRP perpetual futures contracts has risen to 1.5 billion XRP, the highest level since April 20, and funding rates have turned positive. The increase suggests increased demand for long positions or leveraged bets looking to profit from the price rally. XRP has gained 34% this month. Source: Coinglass