ETH Options Open Interest | Navigator
Review Date: February 11, 2022
The U.S. CPI inflation number created the jarring dip we had anticipated, although we thought the dip might come from the geopolitical theater. On the dip, ETH found support near the $3,000. That probably has a lot to do with the huge amount of options contracts that have their value connected to ETH being above or below $3,000.
While this is not intended to be an options lesson, there is an important point to be made here from a technical analysis point of view. When there is huge “open Interest” at a level like $3,000, one of two things can happen. Price can gravitate towards that level, so ETH may not be able to get above $3,250 in the near term because the price may gravitate back towards $3,000. And in the event of another selloﬀ, ETH may bounce off $2,850 and come back to $3,000.
If you want to take a positive approach, If ETH can remain above $3,000 it sets up ETH to move to the next strike with relevant open interest. That price is $4,000.
Bottom Line: If inflation is at 7.5% and the Fed Funds rate is at 0%, it stands to reason that interest rates are going up. We know this and have known it for a long time. If the Fed calls an emergency meeting and hikes the Fed funding rate, then ETH could be stable near $3,000 and possibly rally to $4,000. The Fed doing its job and ﬁghting inﬂation could be a good thing. That said if the Fed makes an announcement that they are dramatically reducing the amount of money they print, that creates downside risk for both stocks and crypto. In the meantime, $3,000 seems like good support for ETH.
Bitfinex Hack Launches (And Kills) a Rap Career
On Tuesday, Department of Justice (DOJ) officials seized nearly 95,000 BTC stolen from the infamous hack of crypto exchange Bitfinex in 2016. The seizure of over $3.5 billion in BTC is the largest seizure of any kind in the department’s history.
In 2016, Bitfinex, the world’s largest cryptocurrency exchange at the time, was hacked for nearly 120,000 BTC. Those coins were worth just over $70 million at the time and accounted for one-sixth of all Bitcoin trading volume. News of the hack plummeted the price of Bitcoin down nearly 40%.
The two charged with laundering the Bitcoin were a married couple named Ilya Lichtenstein and Heather Morgan. The two did not get charged for the hack, but DOJ officials suggested that they were responsible for stealing the funds as well.
Lichtenstein and Morgan were both public people, surprisingly. Lichtenstein co-founded a Y-Combinator-backed startup, and Morgan is an entrepreneur who has written articles for Forbes. The internet was overjoyed to also learn about Morgan’s other side hustle as a rapper operating under the stage name Razzlekhan. It did not take long before Morgan’s music videos surfaced and memes started running rampant.
Bitfinex and the DOJ announced that investors who had funds stolen in the hack would be able to apply to get their money back. However, knowing the bureaucratic nature of the process, it could take some time before affected investors receive any funds.
Additionally, Bitfinex announced it would use 80% of the recovered funds to buy back and burn its LEO token. The LEO token shot from under $5 to over $7 shortly after this announcement.
Bottom Line: Bitcoin has again proved itself as a traceable asset, a win for crypto regulation, and a gut punch for early crypto-anarchist types. LEO token got a lot of attention after the news, but DYOR into Bitfinex and LEO before aping in as this was a temporary hype cycle. Getting arrested was the best thing to happen to Razzlekhan’s music career.
NounsDAO Super Bowl Ad
NounsDAO is a decentralized autonomous organization that auctions generative PFP NFTs each day for participation in the DAO. In the three days leading up to writing, Nouns went for 85, 95, and 118 ETH. 100% of proceeds from the auctions go directly to the DAO treasury.
In January, a member of the NounsDAO team, or as they like to be called “nounders” made a new proposal in the DAO. The proposal detailed that in exchange for one Noun NFT a “prominent beverage company” would feature the famous Noun glasses in a Super Bowl ad. The vote ended with 75 votes in favor of the proposal and only one opposed.
The proposal also added that the company might produce physical beverage cans featuring the Nouns glasses for special events. Nouns holders would be granted access to these events for holding the NFT.
A few weeks later, on February 7, the official Bud Light Twitter page released a video showcasing their new zero-carb beer, Bud Light Next. The above image is a screenshot from this video which we presume will air during the Super Bowl.
This commercial is not Bud Light’s first run-in with NFTs. In January, the brand released its own “Bud Light N3XT” NFT collection featuring 12,722 generative pieces of artwork meant to represent beer, culture, gaming, music, and entertainment.
Bottom Line: The truth is most people won’t care where these glasses came from when they watch this commercial on Sunday. But advertising geniuses mastered subliminal messaging years ago, it is impossible to know the influence this could have on someone’s subconscious. NounsDAO is a great project with a strong community, and to see them partner with a giant like Anheuser-Busch for the biggest sporting event of the year displays a corporate endorsement of the project and the NFT space as a whole.
TM Grade Performance
The TM Grade was able to identify momentum plays that played out well over the past week. In fact, the table below shows a few examples of top-rated coins on Friday, February 4th, and how they performed up to today, Friday, February 11th.
|Token Name||TM Grade as of the 4th||ROI|
|Feg Token||80||+ 77%|
|LEO Token||90||+ 51%|
True Confessions Of A KuCoin Trader
This market has been weird, but what else is new?
I continue to bide my time by holding longer-term cryptos that strike me more as a blue-chip play. But I’ve also allocated a certain amount of my capital to riskier assets that I believe hold outsized opportunities for gains in the near to medium term.
One of these long shots is a crypto project called Crypterium, with the token $CRPT. Perhaps predictably, I am underwater on my initial cost basis at the time of this writing, but I believe this project has some strong things going for it that ought to elevate its price in the future. Crypterium endeavors to build a mobile app that lets users spend cryptocurrency in everyday life, trade, open a savings account, and the like. There is also a globally compatible crypto credit card in the works.
There’s a strong team and existing user base worth mentioning here: the company claims 400,000 registered users and has TechCrunch co-founder Keith Teare as an advisor. It’s also got some star power from the conventional payments world: former Visa UK CEO Marc O’Brien is the present-day CEO of Crypterium. Crypterium caught my attention when it appeared in all three KuCoin indices on Token Metrics: multiple dailies, the weekly, and the monthly. To translate this AI-driven index placement, it’s as though the Token Metrics software is saying “this will be a good one to have for a while.”
I am also playing CRV on the premise that its price moves in a highly cyclical fashion, and as it’s lately been clobbered (along with the rest of the market), so I am attempting to ride it like an elevator from a sub-$3 entry point back up to the neighborhood of $5-6. Let’s see how it goes — I am fully prepared to ride out this bearish market because I haven’t invested any money that I actually need in order to keep the lights on and cover my general well-being.