Article Summary

  • Bitcoin and major altcoins remain rangebound as the market focuses on meme-coins, leading to soaring transaction fees on the Bitcoin blockchain and causing Binance to halt withdrawals twice.
  • Milady (LADYS), a meme-coin, surged by over 5,250% within 24 hours and has a total diluted market capitalization of over $140 million, despite having “no intrinsic value or expectation of financial return.”
  • Bitcoin spot volumes are down 24% over the past week, and open interest surged by 5.3%, reaching a new 1-month high with below-neutral funding rates indicating that pessimists were the key aggressor.

Bitcoin remains rangebound and has now traded in the $27,000s for three consecutive Tuesdays. Bitcoin’s prolonged directionless pattern has impacted most major altcoins as well, whose pattern reflects that of BTC. As conditions remain stable, the market has re-rotated its focus to memecoins, which has often tended to be a negative market impulse, suggesting an over-eager risk appetite.

The Wednesday FOMC press conference last week delivered in line with expectations, as the Target Rate was hiked by 25bps. Jerome Powell also indicated that interest rates were at appropriately restrictive levels. Nonetheless, he also added that further interest rate decisions would be data-driven.

Non-farm payrolls (NFP) surprised to the upside last week, leading the market to price in an 18% chance of a further hike in the next FOMC press conference. All eyes are now focused on Wednesday’s CPI release, which is expected to be a potential volatility catalyst. If the CPI were to surprise to the upside, it could lead the market to reprice hiking expectations for the June 14 FOMC press conference.

What You Should Know

Over the past week, particularly over the weekend, Bitcoin on-chain fees surged, causing Binance to halt withdrawals twice. The withdrawal halt also coincides with an apparent arbitrage erupting on Binance US, with Binance US trading at a 3-5% premium above the rest of the market.

This premium may be caused by market makers leaving the exchange and potential fiat-rail problems disincentivizing traders to take advantage of the ongoing arbitrage opportunity.

Throughout the past week, transaction fees on the Bitcoin blockchain have skyrocketed as the mempool has experienced proper congestion. The congestion originates from the rising popularity of BRC-20, a token standard built on Bitcoin, allowing participants to create and send tokens via the Ordinals protocol.

Ordinals has gradually amassed popularity this year, initially as a means to produce NFT- like assets enabled by the Taproot soft fork in 2021 and Segwit in 2017. Up until now, Ordinals have had a negligible impact on the market, but as of today, the market capitalization of BRC-20 tokens now stand over $500 million.

Ordinals have clogged the Bitcoin network, leading fees to soar. Over the weekend, at least one Bitcoin block saw fees surpass the block subsidy, and on Sunday, transaction fees represented 32% of the miner revenues, a level not seen since December 2017.

Amidst the soaring fees, Binance disabled BTC withdrawals for two 2-hour periods and reshuffled wallet balances, leading to growing fear in the market.

The rally in the market comes as investors now turn their focus on memecoins. Asides from Pepecoin, another memecoin has gone viral, getting boost from no other than Elon Musk, the self-proclaimed Dogecoin chief.

On May 11, Milady (LADYS), the self-organized memecoin of the namesake anime avatar nonfungible tokens (NFT) collection, surged by over 5,250% within 24 hours to trade at a $0.0000001528.

The day prior, American business magnate Elon Musk tweeted a meme using the imagery of a Milady NFT, sending the average Ether sale price of the collection soaring. According to token developers, LADYS has “no association” with Milady creator Charlotte Fang or Milady Maker.

The token “is simply paying homage to an NFT collection we all love and recognize. LADYS is a meme coin with no intrinsic value or expectation of financial return. There is no formal team or roadmap. The coin is completely useless and for entertainment purposes only.”

However, investors have found LADYS to encompass more than just meme value. At the time of publication, the total diluted market capitalization of the token surged past $140 million with a 24-hour trading volume of $230 million.

According to the token’s website, the total supply of LADYS is 888 trillion. The website further explains, “94% of the tokens were sent to the liquidity pool (LP). LP tokens were burnt, and the contract is renounced.”

The open interest held by active market participants on CME fell to a 14-month low on May 2 at 22,132 BTC, with active market participants representing 35% of the total open interest on CME.

The active market participant contribution has increased since, currently representing 38% of the open interest. Still, the open interest and active market participation rate reigns low as institutional activity remains slow in BTC.

The market as a whole has been heavily rangebound throughout the past month, with Large Caps still outperforming the other indices and BTC on the backdrop of Ethereum’s Shanghai Upgrade outperformance.

Bitcoin spot volumes are down 24% over the past week. This trend is historically consistent with a period of price consolidation following large price movements, as we had in March. Currently, many market participants are likely in a wait-and-see phase.

Open interest surged by 5.3% last week, climbing above 280k BTC, reaching a new 1-month high. As highlighted earlier, the growth in open interest was accompanied by below-neutral funding rates, indicating that pessimists were the key aggressor.


The Bitcoin price has ranged for near 2 months. The price has been quite volatile within the range, but there has been no material price action. Smaller price movements have led to lower realized volatility.

The market expectations tend to be backward looking, leading implied volatility to fall as well. In sum, the market currently is in a directionless slumber state waiting for the next spark to lead way.

Funding rates have also fallen amidst BTC’s push below $28k, suggesting cautious positioning with BTC fluctuating at range lows. Amidst last week’s surge in open interest, perp prices lagged behind spot, indicating that the primary force behind the rally above $26,000, is as a result of growth in leverage originated from shorts.