IN THIS ISSUE

🔶 Nakamoto Activation
🎥 Hermetica Hangouts: BOB and Velar
💰 USDh yield recap
📈 Weekly market review

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Nakamoto Activation

Stacks is calling for an orange September with the activation of their Nakamoto Upgrade.

Soon we can expect:

Learn more about the Nakamoto Upgrade and the apps building on Bitcoin, featuring insights from our Founder and CEO, Jakob Schillinger, at the recent Stacks Townhall.

Hermetica Hangout #8: BOB

Our team has lots in store for all you as we eagerly follow the development of Bitcoin DeFi.

This past Tuesday, we held Hermetica Hangout #8 with Dave where we met with BOB (Build on Bitcoin) to talk how they’ve pioneered in the space, how you can earn spice, and the roadmap of ZK-Rollups. Don’t miss it, check out the recording so you’re in the loop.

That’s not all, mark your calendar for Hermetica Hangout #9 on September 3, at 4PM EDT! We’re meeting with Velar to discuss:

On Monday we'll post the official reminder on X, so keep your eyes peeled. Better yet, follow the Hermetica X account and turn on notifications for all updates.

USDh Yield Recap

sUSDh holders earned 7% APY this week, as we round out week #35. The market may chop, but USDh still earns.

Don’t miss out on your chance to earn points plus up to 25% APY — stake USDh today.

Market Review

Bitcoin’s price rallied to $65,000 on Friday but has since dropped below the weekly open, now sitting around $59,600.

Currently, Bitcoin is in a downtrend, trading below several key moving averages (MAs): the 6-month MA at $64,629, the 5-week MA at $60,915, and the 1-month MA at $59,942.

The confluence of MAs around $63,000 will likely act as a barrier to upward price action. The relatively flat price over the last two weeks has allowed the 4- and 5-week MAs to nearly cross over from above, which could break the downtrend and increase the likelihood of a rally to ~$65,000.

The price remains above the 1-year and 200-week MAs, currently at $51,655 and $38,508, respectively. The 1-year MA provided support during the last liquidation event, and many traders may be poised to buy at that level again if the price retraces.

If the price rises, potential resistance levels are at $63,000, $64,000, $68,000, $70,000, $72,000, and $74,000. However, if momentum does not recover, support levels are estimated at $58,000, $55,000, and $49,000.

BTC ETF Flows

Net BTC ETF flows since last Friday were positive, with a total of $150.4 million.

Average daily flows were $30.08 million.

Volatility

Bitcoin's implied volatility (DVOL) is currently at 51.01%, sitting in the 30.9th percentile.

DVOL has been in a gradual downtrend since the liquidation event three weeks ago.

Basis Spread

The basis spread, or the price of a futures contract over its spot price, is positive across all maturities, but the short end of the curve has fallen to almost zero in the last week.

The futures curve is in an archetypical normal contango with front month (September 27th) APR lower than all other maturities. The basis rises in the back month (December 27th) and then flattens out there after. This yield curve is positively sloped. For Bitcoin this is not a bullish curve in the short term.

Bullish Bitcoin futures curves are typically special contangos (Figure 6) where front month has the highest APR, and APR falls every maturity thereafter, but APR is positive along the whole curve.

This is the most bullish curve in the short term because market makers use front month as a substitute for perps and spot during periods of high demand.

Macro

The macro landscape remains stable since the Nikkei liquidation event three weeks ago, but volatility has started to pick up again after hitting a low last week.

S&P 500 implied volatility is currently at 15.64, while US Treasury implied volatility stands at 106.70.

Sincerely,
The Hermetica Team