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SFOX moves crypto market index from ‘neutral’ to ‘mildly bullish’

Christina Comben

It almost feels as if the crypto markets are taking a break. Despite geopolitical pressures that tend to impact Bitcoin’s price such as the US-China trade war and industry news like Bakkt’s Bitcoin futures green light, the world’s largest digital asset has hovered around $10,000 for a while now.

Yet, lack of drastic price movements aside, SFOX – a crypto-assets dealer for institutional traders and investors – has moved its market index from ‘neutral’ to ‘mildly bullish’ for September. But why?

The SFOX volatility report for August

In the SFOX crypto volatility report for August, its research team gathered data on price, volatility, and volume from eight leading liquidity providers and exchanges. They then analysed the performance of six of the leading crypto-assets – Bitcoin, Ether, Bitcoin Cash, Litecoin, Bitcoin SV, and Ethereum Classic.

Based on its findings, SFOX nudged its needle over to slightly bullish for the rest of the month ahead. Before you get too excited though, the crypto-assets dealer clarifies: “It’s worth emphasising that this month’s index reading only slightly favours mildly bullish over neutral.”

So what factors are causing the upswing in the market outlook?

The report focuses on three key areas – market sentiment, price momentum, and the continued advancement of the sector.

SFOX notes that over the last five weeks, the sector has seen continued innovation and interest in Bitcoin from institutional investors.

However, that has also been accompanied by “renewed uncertainty about exactly how cryptocurrencies and other blockchain technology will play into global financial markets”.

A global hedge or a speculative asset?

For example, there’s still a strong and potentially valid argument that Bitcoin provides a hedge against global markets when the outlook is uncertain, and that Chinese investors flock to Bitcoin as a safe-haven asset when concerns over the US-China trade war heighten.

To some extent, this argument was supported on August 5 when the yuan fell to its lowest level against the dollar in 11 years and BTC price spiked by 7% from $10,851 to $11,651. However, the price of gold also increased by 1% during that same period.

In stark contrast, however, when the US Treasury market saw an inverted yield curve, gold price raised again slightly as expected by 0.38% while BTC price fell by 4%.

These price movements, based on the argument that Bitcoin is “digital gold”, led SFOX to conclude that “investors are simply unsure how much of a safe haven BTC is”.

Furthermore, David Martin of Blockforce Capital told Bloomberg that it’s just as easy to make an argument for the fact that Bitcoin is a global hedge as it is a speculative asset.

Major companies investing in the space

While global investors continue to debate over Bitcoin’s role in global markets, major companies are investing in blockchain technology and crypto in general. On August 5, Mastercard posted job positions for a blockchain-based solution the company is developing with R3.

On August 8, Allianz Insurance announced that it is developing a blockchain-based payment system, and on August 26, Telegram finally opened up its testnet for Button Wallet.

All these events appeared to have corresponded with slight price increases. However, it’s unclear “how much news of continued development is really driving the market, especially when these offerings are still in developmental stages”.

Market sentiment appears to be uncertain

From the report’s findings, market sentiment reflects a level of uncertainty for the outcome of crypto. Despite BTC price making returns of 0.61% on August 17, alternative.me’s Crypto Greed and Fear Index plunged to a 244-day low of “extreme fear”.

Hot on the heels of that, Ethereum founder Vitalik Buterin caused a flutter by announcing that the “Ethereum blockchain is almost full” and that’s driving up transaction fees.


While ETH devs continue to work night and day on Ethereum 2.0, ETH price has gradually declined since that comment and is currently down some 9% since August 19. Finally, the gargantuan movement of $1 billion worth of BTC from one wallet to another on September 5 is still being theorised over.


Despite the continued maturity of the sector, these occurrences still fuel uncertainty about its future.

There is plenty of positive sentiment and investment as well, however. Bakkt began taking deposits in advance of its launch, and the CME is reportedly preparing to launch BTC options trading.

SFOX believes that “this marks the latest step in the continued development of more sophisticated, institution-grade trading instruments in the crypto market”.

What factors to watch out for during the rest of September

As far as the markets go and the factors that could influence crypto volatility, SFOX states various key occurrences to keep an eye on for the rest of the month ahead.

These unsurprisingly include the launch of Bakkt on September 23 and the last-trade date for both CME BTC futures and BitMEX futures on September 27, as crypto volatility tends to move around the time of futures expirations.

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