Hello and welcome to the Assets Volatility Overview, the series of articles that monthly analyses all the markets that interest MetalSwap, such as cryptocurrencies, commodities, and the world of DeFi, always seeking to understand the factors that will bring volatility in the following weeks.
Today, in addition to the usual analysis, we will also add an overview of the OP token since MetalSwap has won a Grant from the Optimism team, making it highly likely that this will be the next asset integrated into MetalSwap's Hedging Swaps.
Before we begin, I remind you that if you haven't read last month's episode, you can find it here.
Commodities - Market Overview
Invesco Bloomberg Commodity UCITS ETF Acc
In the last episode, we had speculated that April would be the right month to reverse the downward trend on the monthly time frame, which has been ongoing since September 2022 on the Invesco Bloomberg Commodity ETF. However, even that month turned out to be negative for the commodities market, which continues to suffer. The past month marked the fourth consecutive week of decline for the Bloomberg Commodity Index, the longest negative streak since September 2022.
The prospects of the sector are heavily influenced by China, which continues to release disappointing economic data. The latest of these is related to bank loans, which amounted to $104 billion in April, less than half of analysts' expectations and one-fifth of the amount disbursed in March.
We have experienced a lot of volatility in the past month, especially on the downside, with crude oil recording the worst performance, a decline of 14.29% in the last 30 days. On the other hand, the best-performing asset was the natural gas, after a prolonged period of decline, rebounded and achieved an 11.21% increase in the last month.
Assets performance by Investing.com
Analysis of assets on MetalSwap's dApp
bitcoin price action
The last month saw a period of sideways movement for bitcoin, as it remained trapped within a range of $25,500 to $29,000. Despite the price not moving much, we experienced an incredible increase in transaction fees within the Bitcoin blockchain, primarily due to the latest trend of BRC-20 tokens, which are tokens created within the Bitcoin blockchain using Ordinals technology.
While the average transaction fee had been around $2.5 in previous months, we have now reached almost $20 per transaction.
The open interest, which represents all open positions in bitcoin derivatives, has reached $8.7 billion. Typically, after such an increase, it is possible to expect a decline in this chart due to increased asset volatility.
Bitcoin Open Interest
After the Shapella upgrade, Ethereum touched $2,100 but is currently positioned around $1,800, indicating a negative performance in the past 30 days.
For this asset, all attention is now focused on Lido Finance, the dApp that had control over the majority of ETH staked on the Beacon chain. If the proposal goes through successfully, Lido may finally make ETH withdrawals available in the coming days. Lido's protocol is the last major entity that has not yet allowed ETH withdrawals and currently holds almost 30% of the staked ETH. It is quite likely that we will witness a substantial round of withdrawals.
At the moment, the withdrawal situation is under control, with the amount of staked ETH exceeding the amount present before withdrawals became available.
I would like to remind you that the MetalSwap team has created a specific use case for Ethereum withdrawals. If you haven't read it yet, you can find it here.
ETH deposits and withdrawals
This has been a historic month for gold, as it reached and surpassed its all-time highs touching 2062$.
Given the current situation of strong instability in the global economy, with some major banks in America failing and many others at risk of failure, inflation still present albeit lower than a few months ago, investors still believe that gold can be a safe haven asset and those beliefs have driven gold to reach historic highs.
The volatility of gold, measured by the Gold Volatility Index, remains high. This makes it challenging for companies working with this metal to implement long-term economic strategies. That's why a decentralized, completely thrustless solution like MetalSwap exists, allowing for the opening of protective positions on this asset, catering to both companies and small retail investors.
As always, we also analyse the COT (Commitments of Traders) report, which indicates the long or short positions of three types of investors: commercial traders who work with this asset without speculative intentions, non-commercial traders who are large funds opening significant positions with the goal of making profits, and small traders who have smaller capital. This week, it is interesting to note that non-commercial traders have a significantly long position, suggesting that they believe the upward trend in this asset is not yet finished.
OP price action
As mentioned in the introduction, today we will add an analysis of the OP token in addition to the usual assets, in anticipation of its integration into the dApp.
Currently, OP is traded at $1.66 per unit and has experienced a negative trend in the past month, resulting in a loss of 38%. The circulating supply of OP is currently 335,376,391, which represents only 8% of the total expected supply of 4,294,967,296.
The OP token is ranked 71st on CoinMarketCap and has a market capitalization of $556,768,698 USD.
The volatility of this asset is very high, partly due to its relative youth, as it was launched less than a year ago. It's all-time high is currently $3.11, while it reached a low point in July 2022 at $0.44.
What happened in the derivatives DeFi ecosystem?
DeFi Derivatives TVL by Defillama
The volume of all derivative protocols in the DeFi world continues to grow despite the lackluster sentiment in the cryptocurrency market. Currently, we have reached $4.6 billion locked within these DeFi protocols.
The most widely used derivative instrument in DeFi remains perpetual, but as we saw in the last episode, the options market is also growing.
With its likely arrival on the Optimism blockchain, MetalSwap will capture a portion of these volumes and, for the first time in DeFi's history, bring the hedging Swap in a high-speed transactions and scalable blockchain.
And here we are at the end of the third episode of the Assets Volatility Overview. We hope that this article has helped you in studying both the crypto and commodities markets.
If you're interested in learning more about MetalSwap, we recommend checking out the official YouTube channel, where you'll find various tutorials about the dApp.
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