Recovery Time

Chart of the Day







As previously discussed, BTC's correlation to major traditional indices is currently at its highest level since April 2020. Therefore, it didn't come as much of a surprise when the rally in the stock markets during the late trading hours on Friday (a possible indication that investors' risk appetites within the broader financial markets are returning) was followed up very closely by a relief rally in the crypto market that reversed its past week's losses. In fact, the crypto market even saw its highest intra-day market cap gain since June 2021 over the weekend. This upward momentum was led by none other than BTC, the number 1 cryptocurrency by market cap, as it rose a substantial 16% from last Thursday's low to buoy back above the key psychological $40k barrier.



With BTC currently trading at the $42k level (as of the time of writing), this also marks an impressive 27% rise from BTC's yearly low of $32.9k. In a similar vein, ETH surged 13% over the weekend to scale the $3,000 level for the first time since January of this year. Many Layer 1 tokens also posted very decent recovery gains over the weekend, with top performers like NEAR rising as much as 20% within the past 24 hours.



Not to be outdone, gaming tokens like AXS and GALA have also posted up double-digit percentage gains over the past few days. Although this much-needed relief rally may help to restore some semblance of confidence when it comes to the crypto market in the near-term, said crypto market is still very much enshrouded in uncertainty due to the U.S. Federal Reserve's hawkish monetary policy and growing geopolitical tension.



As such, it would be prudent to consult some key on-chain metrics to glean some insights into the key price levels to watch out for in the near-term when it comes to BTC. For one, and in looking at BTC's UTXO Realized Price Distribution chart, BTC's extant on-chain supply structure appears to be a bit top-heavy, with 24.9% of its circulating supply currently sitting above the $41.5k level. This points to heavy resistance ahead, suggesting that BTC's upside price discovery may not be the smoothest one yet.



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Back to (the) Futures 





After the weekend relief rally, BTC perpetual contracts' funding rates are returning to the neutral zone, suggesting that the returning market confidence may just be doing enough to beat out the negative macroeconomic sentiments that were recently plaguing the market. The options market has also reacted positively to the weekend rally, as the negative skew has been reversed, and all fixed expirations have converged higher.



Additionally, aggressive post-rally calls have also resulted in a tangible shift in IV, and this return to relative calm within the crypto market on the back of the tech stock-inspired rally suggests that the interim bottom for the crypto market may already be in.







Talk of the Town





In recent times, the play-to-earn (P2E) blockchain gaming model has gained popularity all around the world, especially in many emerging economies like the Philippines. This trend was very much kicked into motion by the household P2E and Ethereum-based game Axie Infinity, so it is not surprising at all that it has already managed to rack up nearly $4 billion in NFT trading volume.



However, Axie Infinity has not been having the best time at all in recent weeks, as its native token AXS has been experiencing quite a few drastic price-plunges within said time-frame, raising questions about the viability and sustainability of the Play-to-Earn model.



In response, Axie's creators have now announced several fundamental changes to Axie's gameplay in a bid to resuscitate the blockchain game's in-game economy. These changes include a significant reduction of SLP reward tokens, as well as a change in the reward structure to focus more heavily on online arena battles, and will take effect in the upcoming 20th in-game season.