Fan Tokens Surge in Popularity as Market Sentiment Improves

OG Fan Token ($OG), the cryptocurrency associated with the European Esports organisation OG, experienced significant price fluctuations over the past week.

OG Fan Token ($OG), a cryptocurrency linked to European esports organisation OG, displayed remarkable price movements last week. The token's value surged rapidly from $2.6 to a peak of $14.3 within just four days, before plummeting by over 50% to $6.6 in a single day. Despite this volatility, the token still managed to secure an impressive seven-day return of 178%. During this period, trading volume on Convert surged by over 350 times, as traders utilised the platform to execute large trades while mitigating market risks.

Similarly, Santos FC Fan Token ($SANTOS) experienced a notable surge in trading activity on Convert, with trading volume increasing twelvefold compared to the previous week. The rise in demand for Fan tokens on the Chiliz blockchain was largely influenced by the activity surrounding the OG Fan Token.

decentralised lending platform Wing Finance ($WING) also saw a significant uptick in interest. The platform's partnerships have allowed it to explore various lending markets, including under-collateralized and synthetic token lending. Last week, WING's trading volume skyrocketed by 33 times on Convert, resulting in a weekly gain of 20.3%.

Prosper ($PROS) experienced a remarkable surge in value following an announcement from Animoca Brands, a blockchain and game software company, regarding its intention to acquire additional native tokens of the platform. This news captured the market's attention, leading to a price increase of over 55% within a week, accompanied by an 89.9% rise in trading volume on Convert.

Overall Market

The above chart showcases BTC's price movement in the 8-hour time frame.

Last week, the overall risk sentiment in the financial markets showed signs of improvement, primarily driven by positive developments in both the China A-share market and the Hong Kong stock market. This uptick in sentiment was particularly evident during the closure of the China A-share market for the National Holiday, a period during which our team observed a significant influx of capital into the cryptocurrency sector. This surge in investment led to a remarkable increase in Bitcoin's price, which rose from $60,000 to over $64,000 over the weekend, reflecting heightened investor interest and optimism in the crypto space.

However, this bullish momentum was short-lived. On the first trading day following the reopening of the China A-share market, a significant drop in stock prices cast a shadow of bearish sentiment over the cryptocurrency market. The decline in the A-share market raised concerns among investors, leading to a cautious approach towards riskier assets like cryptocurrencies. Compounding this bearish sentiment was the release of robust labour market data from the United States, which indicated a strong economy and reduced expectations for aggressive interest rate cuts by the Federal Reserve. This development contributed to a strengthening of the US dollar, further pressuring Bitcoin and other cryptocurrencies.

As a result, we witnessed notable sell-offs in Bitcoin during the US trading sessions in the past three out of four days as investors reacted to the changing economic landscape. Our analysis revealed a consistent pattern: Bitcoin's price typically declined by over 2% during US trading hours, while it tended to stabilise during the Asian and European sessions. This trend suggests that market dynamics and investor behaviour during different trading hours play a crucial role in Bitcoin's price movements.

Interestingly, despite the S&P 500 index reaching a new all-time high, Bitcoin faced considerable selling pressure. One potential explanation for this phenomenon is that investors in Bitcoin spot ETFs may be reallocating their capital towards the US stock market, seeking to capitalise on the bullish momentum in equities. This theory is further supported by the ongoing capital outflows observed in 11 Bitcoin spot ETFs, indicating a shift in investor sentiment and strategy. As investors navigate the evolving market landscape, the interplay between traditional equities and cryptocurrencies will continue to shape the dynamics of both asset classes.

On Thursday, the US Consumer Price Index (CPI) data indicated a rebound in the declining inflation rate for September, effectively diminishing the prospects of a 50 basis point interest rate cut by the Federal Reserve in November. Following this news, Bitcoin experienced a swift sell-off during the US trading session but managed to recover most of its losses before the Asian markets opened.

Our analysis maintains the view that the $58,000 to $59,000 range will serve as a support level, from which we anticipate a rebound in Bitcoin's price. Should this support level be breached, we expect Bitcoin to revisit the $50,000 to $52,000 range. If that scenario plays out, we do not foresee the price reaching the $100,000 mark until the first quarter of 2025.

Options Market

The above chart depicts the implied volatility of at-the-money BTC options.