21 Jun, 21

Weekly Crypto Market Wrap, 21st June 2021

weekly crypto market wrap


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Week in Review

Winners & Losers

  • Bitcoin spent the entire week retracing its move to the top of the range that was triggered by El Salvador’s successful attempt to make BTC legal tender in the country. The asset opened at US$39,035 and recorded a -8.83% loss to close the week at US$35,590. The move was further fueled by the continued crackdown on BTC mining in China, with 26 large scale facilities shut down over the course of the week. 
  • ETH bled alongside BTC and other markets this week with relatively quiet newsflow ahead of the London hardfork on June 24th. This marks a key step forward in the mainnet release of Ethereum 2.0, recently pushed back to the end of the year. Overall, ETH recorded a -10.71% loss WoW.
  • The Federal Reserve hinted at a hawkish shift in its monetary policy stance following a meeting on Wednesday that addressed inflation concerns. As the thought of an earlier than anticipated taper and subsequent hike in interest rates sets in, the yield curve flattened out with the US10Y dropping after the news. However, the strong start to the week meant that the downside was limited to -0.37%.
  • The Fed’s hawkish shift caused a sell-off in gold resulting in its worst week in over a year. This was further compounded by the US dollar’s rally, keeping foreign gold investors at bay. Overall, the asset recorded a -6.07% drop.
  • Equity markets faced a similar fate following this week’s Fed meeting, seeing sell-offs across the board as interest rate hike forecasts were moved forward. The S&P 500 suffered a -1.7% drop which correlated closely with the NASDAQ and Dow Jones.

Macro, Technicals & Order Flow


  • Bitcoin’s range highs have held this week as the asset currently kisses the range lows. We’ve had multiple rejects at these levels at 34,000. A clean daily break below 34,000 is bearish for the asset. Note that we’ve had this view over the last 3 breaks across May and June, and have still seen rejection back into the range. 
  • Unleveraged buying is still prominent across longer-term investors and institutions at these levels, but the fundamental, on-chain and derivatives metrics are still divergent. On balance, we’d expect short-term lower prices from here given intermarket flows.
  • As outlined, the week has seen significant intermarket moves on the readjustment of taper and interest rate timeframes from the FOMC meeting. Liquidity drained from (certain) equities, commodities, gold – and flooded into USD. This is a relative monetary play – the Federal Reserve is moving up the scale (albeit slightly) against other Central Banks. After getting fairly killed since the March 2020 onset of the Covid pandemic, the USD is finally getting some hawkish undertones from its Central Bank. In response, Bitcoin has followed the broader sell-off, but still maintained its range.

DXY (USD) Index

Monetary Policy Standings (Courtesy of John Kicklighter – Daily FX)

  • On-chain data is showing lower active addresses which is inherently bearish. However, we are not seeing significant inflows to exchanges yet which would indicate impending unleveraged sell-offs.
  • The caveat to unleveraged selling pressure is the perpetual derivatives rate, which has turned strongly negative (shorts pay longs), indicating short-term levered selling interest. This said, we are still seeing declining Open Interest in the calendar Futures and Options markets.

Number of Active Bitcoin Addresses

Bitcoin Net Transfer Volume from/to Exchanges

BTC Perpetual Swaps Funding

  • The futures basis is in decline, a function of reduced volume and muted expectations in the coming months.

BTC Futures Annualised Rolling 1 Mth Basis

BTC Futures Annualised Basis – Current

Probability of BTC being above x$ per maturity

BTC Futures – Aggregated Open Interest

Total BTC Options Open Interest

Grayscale Bitcoin Trust (GBTC) Premium


  • ETH broke its short-term ascending trendline, touching and briefly breaking 2,000 support (as I write). A significant daily break of 2,000 would likely lead to a retest of prior lows at 1,750.
  • On-chain metrics have been more bullish than BTC, showing significantly less transfers to exchanges over the past few months. Despite this, ETH has not held up as well as the Nasdaq after the FOMC meeting, despite fundamentally being a tech stock in many ways.

Ethereum Net Transfer Volume from/to Exchanges

  • The perpetual derivative funding rate gives more clues on the short-term moves. Like BTC, it has turned fairly negative (shorts pay longs), indicating levered short interest.
  • The total value locked in DeFi projects saw a -12.31% decrease this week to $53.33 billion as the sector stagnated alongside indecision in large caps, further suppressing prices and volumes on the Ethereum network.
  • The amount of ETH in the ETH 2.0 staking contract currently sits at 5,477,253. This represents 4.71% of the total supply estimated to remain locked for ~ one year, continuing to slowly constrict supply.
  • The futures basis has been in decline, although seeing a little respite now. Open Interest is holding, which could indicate some longer-term value in the calendar spreads, although nothing that screams any wild topside moves.

ETH Futures Aggregated Open Interest

ETH Futures Annualised Rolling 1 Mth Basis

Probability of ETH being above x$ per maturity

  • In short, Ethereum is showing divergence in metrics – but again, on balance, intermarket flows and USD driven sentiment this week should keep prices relatively suppressed.

DeFi & Innovation

What to Watch 

  • Over the past few wraps, we’ve pondered if inflation metrics would continue. The Fed and the White House saw the rise as a natural and transient part of the current economic recovery. The stance seems to be changing as President Bullard announced the need for earlier tapering measures. With inflation surpassing expectations and markets heading towards further uncertainty, important announcements from Fed and White House may be just around the corner. 
  • China’s crackdown on bitcoin continues as mining facilities and exchanges close, further contributing to market instability. Meanwhile companies, ETPs and trusts continue to accumulate more bitcoin, and investment banks announce new crypto services to meet institutional demand. Although the market remains uncertain, could new institutional offerings lead to a reversal?


1. What were the significant events in the crypto market for the week of 21st June 2021?

The week saw rising jobless claims in the US, Bitcoin’s hashrate dropping after China’s shutdown of mining facilities, Goldman Sachs beginning bitcoin futures trading, Microstrategy selling stocks to buy more bitcoin, and World Bank rejecting El Salvador’s request for bitcoin implementation. There were also significant market movements in Bitcoin, Ethereum, and other assets.

2. How did Bitcoin and Ethereum perform during the week?

Bitcoin retraced its move to the top of the range, recording a loss of -8.83%, closing at US$35,590. Ethereum recorded a loss of -10.71% WoW. The continued crackdown on BTC mining in China and the upcoming London hardfork for Ethereum were key factors influencing these trends.

3. What were the major developments in DeFi and Innovation?

Digital land in Decentraland was sold for $913k, Swiss bank Sygnum took steps towards institutional-grade access to DeFi, CNN began selling historic news moments as NFTs, and China debuted salary payments in Digital Yuan for the Xiong’an region.

4. What are the key things to watch in the crypto market?

The changing stance on inflation by the Fed and the White House, China’s crackdown on bitcoin, and new institutional offerings in crypto could lead to market uncertainty or potential reversal. The market will also be watching for announcements from the Fed and the White House regarding inflation and monetary policy.

5. What services does Zerocap provide?

Zerocap provides digital asset investment and custodial services to investors and institutions globally. Their investment team and Wealth Platform offer frictionless access to digital assets with industry-leading security. They also provide digital asset liquidity and digital asset custodial services.


This document has been prepared by Zerocap Pty Ltd, its directors, employees and agents for information purposes only and by no means constitutes a solicitation to investment or disinvestment.  The views expressed in this update reflect the analysts’ personal opinions about the cryptocurrencies. These views may change without notice and are subject to market conditions. All data used in the update are between 14 Jun. 2021 0:00 UTC to 20 Jun. 2021 23:59 UTC from TradingView. Contents presented may be subject to errors. The updates are for personal use only and should not be republished or redistributed. Zerocap Pty Ltd reserves the right of final interpretation for the content herein above. 

* Index used:

  Bitcoin    EthereumGoldEquities        High Yield Corporate Bonds      CommoditiesTreasuryYields
BTCETHPAXG        S&P 500, ASX 200, VT      HYG  CRBQXU.S. 10Y

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