Markets
XRP's 'Bearish Skew' Persists Amid 10% Price Slide Following SEC Appeal and ETF Filing
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6 hours agoon
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Bitcoin price
Vivek: Unsurprisingly, The Bitcoin Price Follows Global Liquidity
Published
14 hours agoon
October 2, 2024By
adminWhat We’re Reading: Bitcoin: A Global Liquidity Barometer
I have been intrigued by the significant increase in global liquidity during 2024, driven by extensive money printing and debt expansion, and how it impacts Bitcoin’s price.
Bitcoin is an expression against the government’s monetary expansionist policies, so its price follows global liquidity, as seen here on this chart.
It was fascinating to read the recent report by Lyn Alden and Sam Callahan analyzing Bitcoin’s correlation to global liquidity. This further reconfirmed my view that more monetary expansion drives more people to Bitcoin, increasing prices.
Their rigorous analysis found that over 12-month periods, Bitcoin’s price moves in the same direction as global liquidity a remarkable 83% of the time. This is higher than any other major asset class, making Bitcoin a uniquely pure barometer for global liquidity trends.
The report quantified Bitcoin’s correlation with global M2 money supply, finding a very strong 0.94 overall correlation between May 2013 and July 2024. Bitcoin’s average 12-month rolling correlation was 0.51, while stocks and gold showed moderately high correlations as well in the 0.4 to 0.7 range.
Of course, Bitcoin’s correlation isn’t perfect. Shorter-term breakdowns can occur around crypto-specific events like exchange hacks or Ponzi schemes collapsing.
Supply-demand imbalances also cause temporary decoupling when Bitcoin reaches extreme overvaluation levels during market cycle peaks. Yet despite these breakdowns, the long-term relationship persists.
Right now, liquidity is soaring to unprecedented levels, suggesting Bitcoin could soon embark on a massive bull run if this relationship holds. While I believe no model perfectly captures Bitcoin’s complexity, recognizing its role as a monetary canary in the coal mine can lend valuable insight. If history rhymes, Bitcoin’s sirens are ringing loudly that a liquidity-driven boom will soon be underway.
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blackrock
NIKOLAUS: Retail Keeps Selling Bitcoin to ETFs, Don't Sell Your BTC To Whales
Published
2 days agoon
October 1, 2024By
adminWhat We’re Reading: HODL15Capital
For the past few weeks I have been keeping up with HODL15Capital on X, who has done a tremendous job at posting some of the quickest incoming market data regarding the U.S. spot Bitcoin ETFs. Recently, there have been two charts in particular he has posted that have caught my eye.
Nine months ago, the SEC approved spot Bitcoin ETFs for trading, and since then, the ETFs have seen huge inflows during eight out of those nine months. Since their inception, these ETFs have seen inflows of 312,488 BTC while miners have only created 169,942 new bitcoin.
Number of Bitcoin purchased by 🇺🇸 #Bitcoin ETFs each month👇$IBIT $FBTC $GBTC $ARKB $BITB $HODL $BRRR $EZBC $BTCW pic.twitter.com/mpeurOCUcR
— HODL15Capital 🇺🇸 (@HODL15Capital) October 1, 2024
These ETFs have been the fastest growing ETFs in history, like BlackRock CEO Larry Fink stated, with no real signs of slowing down, especially as we head into a period of time that has been historically bullish for Bitcoin.
These ETFs are gobbling up all the available BTC leaving many thinking: Who could possibly be selling right now? And according to HODL15Capital, it appears to be smaller BTC holders, selling directly into the hands of the ETFs and institutions.
🚨 Small Bitcoin holders continue to sell to ETFs and $MSTR 🤷♂️ pic.twitter.com/hV42fDVlps
— HODL15Capital 🇺🇸 (@HODL15Capital) September 26, 2024
We’re seeing state pension funds, large institutions, wealthy investors and other major players buy and hold shares of these ETFs. Even ETF issuers like BlackRock are buying shares of its own Bitcoin ETF for their other funds. Long story short, I’m seeing smart money pouring into this asset class and, while that is great for the price of BTC, it pains me to watch smaller holders sell their bitcoin directly to the institutions.
Holding Bitcoin over the long term has been proven to be one of the best ways to build wealth. This is a real chance for those interested in investing for their future, who may not currently have proper savings, to start building up wealth in a sovereign way by accumulating BTC and holding the keys to their coins. Instead, these coins are being mostly “locked up” in these ETFs, where those who buy them can only redeem their shares for US dollars and don’t experience the benefits of the attributes that make bitcoin so unique (e.g, freedom to transact globally without permission from a third party).
Based on this data, I fear many of these smaller bitcoin holders are letting a great opportunity to build wealth via holding BTC slip through their fingers. Also, buy not buying bitcoin directly and holding it in self-custody, as opposed to purchasing shares of the ETFs, investors are missing out on what it truly means to own censorship resistant sovereign money. Such a feeling often has the effect of making investors hold bitcoin for the long-term as opposed selling in the short-term based on fear.
The smart money knows exactly what opportunity is here, and they don’t care too much about the freedom aspects of Bitcoin. They’re just filling their BTC bags in a vehicle that suits them better.
Cheap BTC does not last forever. Major players will continue scooping up huge swaths of shares of the ETFs as we hit a new all time highs and beyond. If there’s one thing I leave you with today: Don’t sell your BTC to the corporations, and hold the keys to your coins.
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Markets
Bitcoin Price Hits Spooky Season Stutter as Analysts Warn of Correction
Published
2 days agoon
October 1, 2024By
adminThe Bitcoin price is experiencing a cautious start to October as China’s Golden Week holiday begins on October 1.
This annual seven-day celebration, which marks China’s National Day and extends through various cultural festivities, often results in lower trading activity across global markets—including cryptocurrencies—as Chinese traders and businesses take a break.
Analysts are predicting a slow market this week and are cautioning that Bitcoin may undergo a 5-10% correction before any significant upward movement can resume.
The Bitcoin price is currently hovering around $63,980, down 0.6% in the last 24 hours, while Ethereum is trading slightly up by 0.5% at $2,643, according to CoinGecko data.
The market’s subdued performance comes amid a slew of crucial macroeconomic events lined up for the week, including the U.S. vice-presidential debate between Tim Walz and J.D. Vance on October 1, the U.S. initial jobless claims report on October 3, and the U.S. Nonfarm Payrolls and Unemployment Rate on October 4.
Overnight trading in the crypto market has shown signs of increased volatility.
In a note sent to Decrypt, Jake Ostrovskis, an OTC trader at Wintermute, explained that “IV prints higher led by short-dated contracts – pushing VRP to 13/14pts in the majors.” In simpler terms, implied volatility (IV) for short-term options contracts is rising, which has created a volatility risk premium (VRP) in the market, suggesting that traders expect sharp price swings in the near term.
Ostrovskis noted that last Friday’s $5 billion options expiration (OPEX) could lead to heightened market fluctuations.
“We’re seeing some of this flow overnight as we approach month-end,” Ostrovskis added, pointing to shifting dynamics in both Bitcoin and Ethereum trades.
Notably, he added, spot Bitcoin trading dipped below the $65,000 mark, with the volatility surface indicating a downside bias until late October or early November. However, Ostrovskis observed that “current positioning suggests support for a post-election rally.”
Analysts from Bitfinex caution that Bitcoin’s recent gains may be hitting a short-term ceiling.
“Bitcoin has reclaimed key on-chain levels such as the Short-Term Holder Realised Price ($62,750) but there are warning signs,” they said in a note sent to Decrypt. Spot market buying has recently flattened, the analysts added, suggesting the market may have reached temporary equilibrium.
Additionally, open interest (OI) in Bitcoin futures has surged past $35 billion, a level that has historically correlated with local price peaks. While this could indicate the market overheating, Bitfinex analysts believe a modest 5-10% pullback could reset OI without derailing the overall uptrend.
Valentin Fournier, an analyst at BRN, echoes these sentiments, pointing out that Bitcoin ended September with a 3.5% loss.
“The Stochastic RSI continues to signal bullish potential, but the MACD indicates weakening momentum,” Fournier stated. He added that Bitcoin’s Relative Strength Index (RSI) has exited overbought territory, signaling a potential correction. A dip into the $61,000-$62,500 range, he suggests, could serve as a solid foundation for a renewed uptrend.
“The U.S. unemployment rate will be a crucial market-moving event,” Fournier said. Any deviation from the expected 4.2% rate could impact market sentiment and influence risk assets, including cryptocurrencies, he added.
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