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Markets leaned cautiously against risk, with crypto outperforming its predecessor. ETF movements had their biggest one-day highs since October as CPI, Treasury auctions and a week of FOMC data could restore volatility. In addition, we discuss the new WET indicator, the HumidiFi prop AMM indicator.
Signs
Markets leaned towards risk, with leading crypto and traditional instruments mixed. BTC posted a small gain (+2.3%), outpacing the gains made by the S&P 500 (-0.3%) and Nasdaq 100 (-0.2%), while Gold held roughly (+0.3%). The biggest laggard was the Perp Index, which contracted by -5.1%.
Perps (-5.1%) were well-weighted for the day, weighed down by an intraday spike-and-fade across dYdX, GMX, and especially HYPE. The midday squeeze lifted the sector a little before the momentum stopped and returned to the bottom. JUP rose as much as 9% before retracing most of its gains. Meanwhile, HYPE has been struggling since late, as code builders create new relationships with users, and the market expects TGE from. his friend Lighter.
Looking ahead, markets will look to this week’s CPI publication and the mid-week Treasury bond offering, both of which could restore risk. With volatility still being discussed on a large scale, any dramatic risk that causes a major move.
Market Changes
The trend clearly changed. BTC ETFs drove most of the moves ($287 million), ETH had the best day since Oct. 28 ($142 million) and SOL contributed a little ($16 million). This is the first clear sign of a rebound after almost a month of choppy to negative notes. The increase reflects the short-term stability of factors such as the FOMC, the rate of inflation, and employment. It may also be due to quarter-end optics, as distributors often also show benchmark visibility in liquid adhesives during heavy weeks.
However, AUM-to-market-cap ratios tell a different story. BTC remains close to ~6.6-6.8%, ETH continues for months from ~3.3% to ~2.8%, and SOL, while rising, remains below 1%. This difference means that price appreciation, rather than steady inflows, has become more important in holding ETFs.
At this point, BTC’s entry appears to be more of a re-risking than a new certainty. Markets from other countries are showing an elevated base but falling on OI, a sign that equity capital currently favors high-level exposure.
ETF movements are becoming more important to BTC, as buyers of the “DATCO” brand are no longer carrying it. The latest Treasury Holdings data shows that, aside from Strategy (MSTR), the company’s accumulation has been for several months. Names like NAKAMOTO, SMLR, SQNS, and smaller financial groups have added modest amounts, which are not contributing anything to the increased demand. Even MSTR may not continue to accumulate as it did before.
This is especially true since the major BTC DATCOs have mNAVs below 1, minus one BTC play that dilutes shareholders. In other words, the corporate marketing that helped explain the past and early stages of the season is no longer visible in BTC.
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