As of 15:00 on October 16, 2023 (UTC+8), the real-time price for 1 btc to usd was $27,500. The high and low in the past 24 hours were at $28,200 (+2.5%), and the lowest fell to $26,800 (-2.5%), having a fluctuation range of 5.2% (standar deviation of 1.8%). The transaction volume was 18 billion US dollars, of which Binance contributed 34% (6.12 billion US dollars) and Coinbase Pro contributed 16% (2.88 billion US dollars). The major reasons for the price action are the September 3.7% yoy increase in the US CPI (higher than 3.6% expected) and the 75% rise in the probability of BlackRock’s Bitcoin Spot ETF approval (Bloomberg figures).
Technical analysis shows the 4-hour RSI of Bitcoin at 54 (neutral zone) and the 4-hour MACD having recorded a golden cross in the positive zone above the zero axis. If it breaks $28,500 (the high of September 2023), it may initiate the liquidation of $320 million value short contracts (source: CoinGlass), and the target would be the psychological level of $30,000. The support level is $26,500 (200-day moving average). A drop below this level may lead to a return to $25,000 (61.8% retracement Fibonacci level). On-chain metrics show that “whale” addresses holding more than 10 BTC in their wallets have net accumulated a total of 12,000 additional BTC (some 330 million US dollars) in the past week, a record for one week in 2023 (source: Glassnode), since the exchange’s BTC reserves have fallen to 12% of the circulating amount (a record low), cutting selling pressure.
Macroeconomic pressure and regulatory dynamics are complementary. The 10-year US Treasury note yield rose to 4.8% (a post-2007 high), which weighed down on the value of risky assets. The 30-day correlation between the Nasdaq index and Bitcoin fell to 0.35 (yearly low), which reflected an increased safe-haven quality. In regulation, the SEC postponed its decision on the Ark/21Shares Bitcoin ETF until January 2024. But since the victory of Grayscale, the GBTC’s negative premium rate decreased to -12% (-48% when the year 2023 began). If it is changed to a spot ETF, it may receive an inflow of 5 billion US dollars (estimated by jpmorgan Chase).
The derivatives market indicators are polarized. Implied volatility of the Bitcoin options on Deribit Exchange went up to 65% (52% 30-day average), and the open interest of call options with a strike price of $30,000 was 35,000 BTC (notional value $960 million) hoping for a breakout prior to year-end. However, the funding rate of the perpetual contract turned negative (-0.01%) as an indication that longs with leverage are overbought. If the price falls back below $27,000, it can trigger a $540 million unwinding of a long position.
Miner activity is the lower support. The total network computing power has risen to 450 EH/s (all-time high), but the spiking in electricity price has caused some of the mines to close. The computing power difficulty should reduce by 4.2% (the next adjustment date is October 25th). The miners’ current positions amount to 1.84 million BTC (9.5% of the circulation supply). In case the price drops below $26,000, the selling pressure can grow stronger (miners sold 80,000 BTC in one month in 2022).
Recommendations for operation strategy:
Short-term trade: If it closes above $27,500, a light position can be initiated to long up to $28,500 with a stop-loss at $26,800.
Event hedging: Purchase a December-expiring $25,000 put option (at about $1,200 an option) as a hedge against ETF extension risk
Long-term positioning: Accumulate positions as the average cost of frequent investment goes below $25,000 with the goal to break above $40,000 before the halving cycle in 2024.
in summary, 1 btc to usd is subject to macro interest rate pressure in the short term. However, on-chain accumulation and ETF expectations underpin bullish rationale in the medium and long term. The range of price volatility for this month ought to be between 25,000 and 30,000 US dollars. Black swan events are to be avoided – for instance, in March 2020 when there was the COVID-19 crisis, Bitcoin dipped by 37% within 24 hours, and the loss of liquidity led to the widening of the exchange spread to 20%.