Market continues to struggle despite show of support from Billionaires Ray Dalio and Carl Icahn
Markets started the week in a promising fashion, rebounding strongly from the Sunday night lows as Bitcoin (BTC) traded above $40k on Wednesday before sellers returned and pushed prices back below $34k.
It was a similar story across the alts space with several popular alts staging strong recoveries over the first half of the week before giving back most of the gains by the weekend.
TDX remains cautious at current levels and sees the market trading in a range in the near-term ($32k — $42k on BTC, see our technical note from May 26). Rallies are likely to run into overhead resistance from participants who bought too early into the “dip” and would look to sell at around their breakeven levels.
Conversely, those who are under-invested in the cryptos will be looking to add to their exposures on further dips.
Clients who are in the latter camp are advised to be more selective and accumulate tokens with strong fundamentals rather than those that are over-hyped but have little practical use.
Contact the desk for product ideas on accumulating quality tokens at a discount to current prices.
In other news, yet more DeFi protocols on the Binance Smart Chain (BSC) suffered losses from flash loan attacks — BurgerSwap reported lost $7.2 million while Belt Finance reportedly lost $6.2 million. This is following recent losses on other BSC protocols including PancakeBunny and Spartan DeFi.
Volatility & Skew
Implied vols have softened in the past week but are still trading at elevated levels despite the markets trading sideways for a number of sessions, suggesting participants are still cautious of another potential sell-off.
As mentioned earlier, we are taking a cautious approach at current levels and not aggressively adding to positions.
We have seen interest in our Coin Linked Contracts to accumulate BTC & ETH at lower levels with attractive yields (150% APR on a one-week ETH product traded on Friday)
We are also looking at July and Sep call spreads on ETH as a low-cost way to get long the market at current levels.
Despite the increasing frequency in flash loan attacks on DeFi protocols on the BSC network, the TDX Yield Generator continues to provide steady returns for our clients with a realized yield of 29.15% APR for the week ended 28 May. Contact the desk for more details.
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