PraxisVeritas.io pfp

PraxisVeritas.io

@praxisveritas

73 Following
36 Followers
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
ETH's volatility risk premium - the ratio between option-implied and realised volatility - just hit one of its lowest readings since data are available. Using Deribit DVOL data and a Rogers-Satchell 30 day estimator for realised vol shows a collapse in the VRP last seen in mid-June 2021. Normalisations in the VRP have tended to precede or coincide with spot price recoveries, but timing hasn't been consistent historically.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
https://warpcast.com/praxisveritas/0x70fdf7c8
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
We can use stablecoin data to generate alternative market sentiment and fragility metrics. Since stablecoin trading pairs are generally the first destination for derisking positions, they can dimension risk appetite. Most risk-on is a rising nominal stablecoin supply with a declining overall market cap share.
1 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
It's been about 6 months since we've seen the kind of persistent net CEX outflows of ETH that have been taking place in the last few weeks. Persistent net outflows generally dimension regimes of rising ETH price.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
On-chain activity measured by daily active addresses continues trending up on both Bitcoin and Ethereum
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
After 3 months of almost persistent net inflows into centralized exchange wallet addresses, we are seeing a shift to net ETH outflows from exchanges. In the past, this has been consistent with positive price trends.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
When does ETH/BTC bottom? One of the most striking divergences between ETH and BTC are the centralized exchange net on-chain flows. While BTC has been seeing persistent net outflows for the past few months on a rolling 14 and 30-day sum basis, ETH continues to see net inflows. The sell pressure this creates for ETH continues weighing on its price vs. BTC. If anyone has an idea about which entities are responsible for this please reply. It's a solid hypothesis that ETH/BTC bottoms when this divergence normalizes.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
The Praxis Veritas prediction engine has been flagging the positive shift in the ETH price regime since September. The likelihood remains very high that we continue in the current rising price regime through mid-December.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
Major stablecoin (USDT, USDC & DAI) issuance continues pushing to new highs on a daily basis over the past few weeks. One indicator we can use to assess the broader crypto rally is to look at how major stablecoin volumes are changing relative to the aggregate market cap. The second chart below plots the 1 month change in the major stablecoin share of the aggregate crypto market capitalization in grey. Periods of persistent declines in the stablecoin share coincide with broad price increases in the window since these data have been available. Currently we are seeing the stablecoin share decline by ~1% point over the past month.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
The probability of ETH being in a rising price regime continues increasing through Oct. The shift in price regime probability started in mid-Sep.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
Regarding BTC dominance, it's possible that the reason we have seen continue to push to cycle highs in 2024 has to do with market conditions that dominated in 2023. The chart below shows the Goldman Sachs financial conditions index as a 9 month leading indicator of BTC dominance. The real easing in financial conditions, which took place in 2024, has yet to show up in crypto market structure.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
Uptober looking more and more likely as the probability of ETH being in a rising price regime continues climbing. Check the link in the bio for more on how the probability estimate is generated.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
ETHUSD Risks Start Improving in mid September The Praxis Veritas ETHUSD forward-looking rising price regime probability starts to improve to around 10% beginning in mid-September. This is the most persistent improvement after a sharp decline through July and August. As a reminder, price regime predictions incorporate macro and cross-asset factors as well as numerous inputs idiosyncratic to the asset under analysis - in this case ETH. On the cyclical data side, we have seen a marginal improvement in global data surprise indices in recent weeks. The signs of a true inflection point are not yet there, but at the margin the rate of economic data deterioration could be moderating. Ethereum's utilisation at the L1 level is stabilising in terms of daily active addresses while L2 activity remains in an uptrend. Volatility risk premia have reached a local inflection point and continue rising.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
Rarely have we seen a 3 month period where the ETH daily return distribution has been as negatively skewed as over the past 3 months. Last time was in the immediate aftermath of FTX. Putting aside pessimism on CT, this is an empirical reflection that price action has also been unusual.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
BTC and ETH: when will the lashings stop? [continued] How can we improve our confidence about an important inflection point in BTC and ETH after the brutal recent price action? First two indicators mentioned were volatility risk premia. Continuing with net flows into centralised exchange addresses: this should be relatively straightforward to interpret - BTC or ETH net inflows into CEXs are more likely to coincide with selling pressures dominating markets and vice versa. Currently we are seeing both BTC and ETH net inflows on a rolling 14 and 30-day basis. No sign yet of inflection points here.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
BTC and ETH: when will the lashings stop? One place to look is the volatility-risk-premium, which compares implied with realised volatility. For BTC and ETH, the implied values are the Deribit DVOL indices, while the realised vol data are Rogers-Satchell 30 day vol estimators, which incorporate intraday price action. Although data are only available since 2021, inflection points after negative price action have occurred around low percentile readings of the VRP. For BTC, current values are on par with the start of mid-July's price recovery, but still higher than January and May's inflections.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
First recording of a human voice is from 1860 and only recently recreated from an imprint of the sound wave found in a Paris archive. https://www.bbc.com/reel/video/p0j7x5f7/listen-to-the-oldest-known-recording-of-a-human-voice
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
Putting the US gov't aside, one of the more interesting developments on the supply side is about the Mt. Gox coins. One safe assumption is that as this process unfolds the willingness by creditors to sell BCH would be much higher than BTC. If it therefore surprising to see BCHBTC bouncing in recent days. Some evidence that the Mt. Gox impact on price is over.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
One of the lessons we learned recently from the German govt sale of Bitcoin is that price need not linearly respond to amount of assets sold. Most of the BTC price decline around this event occurred as relatively small amounts of the 50K were transferred out. We can apply this logic to analyzing ETHE, which is currently undergoing a sizable drawdown in assets after spot ETH ETFs started trading. From 2.92 Mln ETH on the eve of ETF conversion to 2.28 Mln as of Friday, the drawdown represents ~22% of assets in ETH terms. So far ETH prices have fallen ~10% as this drawdown unfolds, in both USD terms and even more against BTC. While we can't know whether the bulk of the price decline is behind us, it's likely that we see a rapid decline in sensitivity between ETHE asset declines and price changes going forward. This should be true particularly as other spot ETH ETFs are seeing relatively strong inflows since launch.
0 reply
0 recast
0 reaction
PraxisVeritas.io pfp
PraxisVeritas.io
@praxisveritas
The horse race continues and it remains close. Over the past two weeks, BTC+ETH have taken a slight lead over COIN equity, but it remains close.
0 reply
0 recast
0 reaction