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Extreme Greed Returns as Bitcoin Dominance Falls

Oct 26, 2021 · 3 min read

By Jeremy Ong, Genevieve Yeoh, and Duncan Reucassel

GBTC Slowly Recovers From BITO Launch

Extreme Greed Amidst a BTC Dominance Pullback

  • After rising for a month with ETF anticipation, we’ve seen a slight pullback as the broader crypto market rallied. ETHBTC has surged 12% this week alone, alongside notably strong performance from other L1s (SOL, AVAX, etc.).
  • A word of caution (especially when deploying leverage), the Crypto Fear and Greed Index is back to highs we haven’t seen since early March, officially marking “Extreme Greed” levels. However, this doesn’t mean a deep pullback is guaranteed, especially since momentum is a key input into the index’s calculation. The adage “the market can remain irrational longer than you (or bears) can remain solvent” is especially true in crypto.
ETH Futures Open Interest Reaches New High

  • ETH had its highest daily close ever yesterday, closing at $4,220 on Coinbase, but its latest price rally coincided with new record highs in futures open interest. Binance and FTX still lead the way as the largest two exchanges, currently making up ~41% of ETH open interest.

  • While this move up in open interest may signal excessive leverage, it’s worth noting that the perpetual funding rate, a useful measure of froth in this futures-dominated market, is nowhere close to the mania levels seen in January to April 2021. This could be due to a combination of delta-neutral traders farming yield with cash and carry trades, as well as bears stepping up with short positions as ETH grinds higher.

SCRT, ONE, FTM Outperforms Other L1s This Week

  • In a previous report, we covered how major L1s are relentless and have been outperforming almost every other category since the June 2021 crypto bottom. This week, this has trickled down to smaller L1 tokens such as SCRT (+98%), ONE (+60%), and FTM (+47%).
  • Despite being outperformed by SCRT and ONE in the last 7 days, FTM has had a monster October so far, almost tripling its token value from $1.20 to $3.20 since the monthly open.
Notable Tweets

China’s global share of bitcoin mining finally drops to 0 after banning it for the 1283127th time.

A masterclass from our very own @lex_node.

FTX lists stETH, stSOL liquid staking derivatives.

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