Ooki Market Watch for June 13, 2022

DAO -

Fed minutes, housing numbers, and more market updates

In this weeks Ooki market watch we are covering the latest crypto and macro economy news including:

  • Federal Reserve June interest rate decision
  • Yen/USD sell off
  • stETH depeg
  • Celsius halting withdrawals
  • Ooki interest rates
  • Ooki Twitter spaces
  • ETH/USDC price drop on Uniswap
  • Bitcoin WBTC token transfers
  • Gold and commodity markets
  • Upcoming weeks market calendar

Equity Markets

This week the market will be anticipating the Fed Interest Rate decision on Wednesday. The Fed was expected to raise rates 50 basis points on Wednesday, however following the higher than anticipated inflation numbers last week, Barclays anticipates the Fed raising rate by 75 basis points this week instead of 50 basis points as originally planned. The Fed's increased hawkishness may be due to the perception that inflation is increasing instead of slowing down. U.S. Rate Futures priced in a 43% chance (up from 4% on Thursday) of Fed Raising rates by 75 basis points at the June meeting on Wednesday.

Following the worse than expected inflation numbers last week, the US Stock market sold off and finished the week on the lows with the Dow down more than 880 points on Friday and down over 4% on the week.

On Monday June 13th the Japanese Yen continued selling off and reached a 21 year low against the US Dollar with a price of of $145 YEN/USD.

Crypto Markets

The crypto market continued selling off on negative headlines causing over $600 million in liquidations over the weekend. The sell off was partially a result of the stETH/ETH depeg.

stETH reached a low of 0.94 stETH/ETH exchange rate, this caused forced sellers who had leveraged stETH to be liquidated across the DeFi ecosystem.

One of the larger CeFi protocols, Celsius, was also affected by this. Only 27% of Celsius' ETH is liquid, the rest is either stETH or staked in ETH2, so inaccessible for at least 1 year.

Just realised that Celcius has 400m of ETH staked directly (no liquid staking, just vanilla staked ETH) in addition to their 450m stETH. Maybe they can exit stETH OTC to fulfil obligations but the 400m (at these prices) directly staked is locked probably for around a year.
— Cobie (@cobie) June 13, 2022

Due to Celsius depositors requesting to withdraw ETH, some speculated that Celsius was unable to honor withdrawals and faced insolvency. A few hours later, Celsius halted withdrawals of users funds. Celsius moved over $80m BTC to Binance causing further selloffs during low liquidity weekend markets. Ethereum reached new lows of $1175 and Bitcoin sold down to $24,000.

🚨 Celsius reportedly transferred $320,000,000 worth of crypto to FTX, before announcing they would halt all trading and withdrawals on the platform 🚨
— The Altcoin Hub (@TheAltcoinHub) June 13, 2022

As investors tried to front run this liquidation from Celsius, Binance halted withdrawals of Bitcoin due to a stuck transaction backlog.

BINANCE CEO SAYS TEMPORARY PAUSE OF BITCOIN WITHDRAWALS ON BINANCE DUE TO A STUCK TRANSACTION CAUSING A BACKLOG - TWEET
— *Walter Bloomberg (@DeItaone) June 13, 2022

Later news broke that Celsius had leveraged Maker BTC positions risking liquidation at $22k.

🚨 Celsius Network has 17,919 $WBTC leveraged in Maker protocol. This position faces liquidation at $22,584/$BTC. $278 mil $DAI debt, making it the largest individual debt position on the protocol. pic.twitter.com/MNF0B3zbQv
— Dirty Bubble Media: 🌡⏰💣 (@MikeBurgersburg) June 13, 2022

Ooki Interest Rate Updates

Despite the extreme market volatility over the past few days, Ooki continues to perform as expected without any slowdowns or issues.

Ooki continues to offer the best stablecoin interest rates. As of the time of writing, the lending rates on Ooki are a great way to generate yield in the current market environment.

With lending rates as high as 41% for USDT, and 64% for Frax on Arbitrum. Finding comparably high yield opportunities elsewhere is unlikely.

Ooki Upcoming Announcements

Ooki will be hosting a Twitter spaces event this week to cover upcoming news such as Optimism grants and much more. Remember to sign up for notifications.

Overall Market

📉 ETH - $1180

Ethereum reached a new low not seen since January 2021. ETH lost 35% of it's value since Friday afternoon. On Uniswap ETH/USDC briefly wicked down to $950 (chart) with over $100m in liquidity on the pair.

On the RSI, Ethereum reached levels not seen since 2018.

📉 BTC - $25,000

Bitcoin is down almost 25% since Friday afternoon. As of Monday morning over 65,000 WBTC was transferred, with many speculating this was due to Celsius.

📈 Gold

Gold ended the week near the highs breaking $1870 (see chart).

Upcoming Market Events scheduled this week

  • June 13, 2022 - 18:00 PM EST Fed's Brainard Speech
  • June 14, 2022 -12:30 PM EST USD Producer Price Index (MoM May)
  • June 15, 2022 - 12:30 PM EST Retail Sales / FOMC Economic Projections / Fed Interest Rate Decision
  • June 16, 2022 - 12:30 PM EST Housing Starts / Building Permits / Jobless Claims
  • June 17, 2022 - 03:00 AM EST  BoJ Monetary Policy Statement
  • June 17, 2022 - 15:00  PM EST Fed Monetary Policy Report
Interested in contributing to the Ooki DAO's weekly market recap? Drop us a message on Discord or Twitter! The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Ooki. The information set forth herein has been obtained or derived from sources believed by the author to be reliable. However, the author does not make any representation or warranty, express or implied, as to the information's accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision and it has been provided to you solely for informational purposes only and does not constitute an offer or solicitation of an offer, or any advice or recommendation, to purchase any securities or other financial instruments, and may not be construed as such.