December is always a special month for financial markets, with the famous Christmas rally often boosting the prices of major assets, both traditional and crypto. In today's episode, we will analyze the current concerns related to the world of commodities due to the problems encountered with cargo ships in the Suez Canal. We will also examine the crypto market, where the now-anticipated spot ETF on Bitcoin seems to be fully priced in by investors.

Commodities market overview - Instability in Markets

Invesco Commodity ETF

Being the last Market Insight Volatility of the year, we have decided to also analyze the general performance of the commodities market in 2023. As always, we take the Invesco Commodity ETF issued by Bloomberg as our reference for this market's analysis and notice that in these days the price action is positioned on an extremely interesting support level. After 8 consecutive weeks of losses, the ETF is trading just above 22 points, a level that has proven to be extremely important over the past two years.

Commodity investors over the past week have also had to face the crisis occurring in the Suez Canal, which has brought significant volatility to individual commodities like oil and gas. Although the situation is still under control, concerns that it could escalate into a wider crisis are not to be dismissed, hence implementing hedging positions with tools like MetalSwap could in the future help investors and traders protect themselves from events of high volatility.

Analysis of assets on MetalSwap's dApp

As mentioned in the introduction, the crypto markets are experiencing a positive moment, especially because the Bitcoin ETF seems to be a done deal and its approval is taken for granted for Q1 of 2024.

Bitcoin - 14 green weeks, time for a retrace?

Bitcoin price action

There's no doubt that 2023 has been a spectacular year for Bitcoin specifically, but in general for the entire world of cryptocurrencies, which has seen a constant rise throughout all 12 months of the year. Bitcoin is now, after 14 consecutive positive weeks, at over $43,800 with a performance in the last year of 156%.

Now, the question all investors are asking is about a possible price retracement, especially in the days following the ETF's approval. In these cases, some investors expect a price action behavior according to the idea of "Buy the rumors and sell the news", meaning that the speculation that anticipated the ETF approval might dissipate, causing a price retracement. Obviously, no one knows what will happen to the price of Bitcoin in the coming weeks. 

It's precisely on these occasions where protection tools like MetalSwap can offer peace of mind to investors, simply by canceling the volatility of the underlying asset for the period determined by the user.

ETH - Weaker than Bitcoin

ETH price action

It's undeniable that it has also been a positive year for ETH, with a reported performance of 86% over the last 12 months. However, it has also shown greater weakness compared to Bitcoin, which, as we saw earlier, has had a much better performance. Indeed, ETH has had "only" 8 consecutive positive weeks in recent months, with the current week seeming to end this positive trend.

Despite this, the Ethereum blockchain and all its layer 2s have seen massive use in these last months of the year, bringing ETH to have a deflationary supply. Specifically, in the last week, ETH had a negative inflation of 0.942%.

Ultra sound money

GOLD - New All-Time Highs

Gold price action

December was a historic month for gold as it reached and surpassed the previous all-time high, reaching a peak on December 4th at $2140/OZ. Overall, it has been a year of lateralization for this asset, which had already entered 2023 at very important quotations and reporting a final performance of around 11% with price movements being determined primarily in relation to international monetary balances and thus the decisions of the respective central banks of the various countries.

OP - A volatile year

OP price action

Like the majority of altcoins within the crypto panorama, OP also had a very eventful year in terms of price action. The first months of 2023 were exceptional for this asset, which rose from a low of $0.90 to trading above $3.5 per unit. In the latter part of the year, OP then tried to recover and is currently close to, but still below, its 2023 high. Optimism has nonetheless confirmed itself as one of the best and most widely used Layer 2s, thanks to its speed and cost-effectiveness in user experience.

We thus conclude the last episode of Market Insight Volatility that has accompanied us throughout 2023 with monthly updates regarding all the assets of interest for MetalSwap. 2024 will be a year full of news for the crypto world and specifically for MetalSwap, and we look forward to continuing this journey that started over 2 years ago.

-The DeFi Foundation

✎ What is MetalSwap?

MetalSwap is a decentralized platform that allows Hedging Contract on financial markets with the aim of providing coverage to those who work with Digital Asset and an investment opportunity for those who contribute to increase the shared liquidity of the project. Allowing the protection for an increasing number of operators.

With Hedging Contract we enable hedge swap transactions through the use of Smart Contracts, AMM style.

It's great to Hedge the Risk of Price volatility with MetalSwap dApp !