On September 29, Boutique crypto research firm Reflexivity Research — via a series of posts published on X (the social media platform formerly known as Twitter) — provided an in-depth analysis of the crypto market’s performance over the past month. The thread, powered by VeloData, covers various aspects such as centralized exchange volumes, implied volatility, open interest, and more.

According to Reflexivity Research, centralized crypto exchange volumes have been consistently dropping. This trend mirrors the decline in on-chain volumes, liquidity, and even social and Google search trends related to Bitcoin and other cryptocurrencies.

The thread also mentions that Deribit’s implied volatility index has been on a downward trend. Reflexivity Research interprets this as a sign of reduced expectations for significant price movements in the crypto market for the foreseeable future.

Reflexivity Research points out that after the multibillion-dollar open interest wipeout that occurred last month, futures open interest has continued to decline. This trend is evident in the chart of Bitcoin’s USD-denominated open interest.

The open interest for Bitcoin CME futures also shows a similar declining trend, as per the thread by Reflexivity Research.

In the thread, Reflexivity Research recalls that in late Q2 and early Q3, a significant driver of Bitcoin’s price action was trading during US hours. However, this US-driven demand for Bitcoin has now clearly diminished, falling below the cumulative return of APAC trading hours over the last six months.

Reflexivity Research notes that the GBTC discount to net asset value (NAV) has slightly rolled over in the past month but has closed in significantly year-to-date. The current GBTC discount to NAV stands at 23%.

The thread mentions that the SEC has just 15 days left to decide how to respond to Grayscale’s win regarding their initial denial to convert to a spot ETF. Reflexivity Research suggests that this is a crucial point to monitor for clues about the SEC’s upcoming decision.

Outside of leading digital assets, Reflexivity Research observes some pockets of idiosyncratic bidding for select mid-large cap altcoins. Maker (MKR) is one such example, driven by the RWA narrative in the current higher-for-longer interest rate environment.

Another standout mentioned by Reflexivity Research is Chainlink (LINK), which has outperformed most large caps over the last week. This performance is likely due to the success of CCIP and the upcoming SmartCon conference on 2 October.

Reflexivity Research sums up that September was another lackluster month for the crypto markets, characterized by liquidity, volatility, open interest, and volume declines. However, they note that there have been pockets of idiosyncratic outperformers for savvy market participants.

Featured Image via Midjourney