On October 4th, Bitcoin (BTC) remained relatively stable at the $27,500 mark, with investors closely monitoring the soaring yields in the United States.
Despite the calmness in BTC price action, the U.S. dollar exhibited considerable volatility, seizing the attention of market participants.
After a week of turbulent trading, Bitcoin was once again searching for direction, prompting market analysts to identify critical price levels.
Skew, a prominent trader, pointed out that market participants were selling towards the $27,600 level, emphasizing the significance of reclaiming this price level.
He suggested that a substantial upward movement could follow once this level is regained.
Another trader known as Crypto Tony identified $27,000 as a crucial support level. Mark Cullen, in line with this sentiment, stressed the importance of Bitcoin holding the $27,000 area, particularly given the challenging conditions in traditional financial markets.
He observed that Bitcoin had exhibited a reaction at his designated zone and the breakout trendline. Cullen underscored the significance of BTC maintaining the $27,000 level, especially until other markets stabilized.
In contrast to Bitcoin’s relative stability, legacy markets on October 4th were notably less secure, primarily due to a surge in U.S. 30-year bond yields, reaching levels not seen in 16 years.
This development raised concerns among commentators about a potential market meltdown.
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Skew suggested that the unease surrounding the macroeconomic forces at play was a contributing factor to the lack of substantial BTC trading volume.
The market appeared to be cautiously testing the waters, with most participants being perpetual contract buyers.
Many investors were opting to hold cash amid market distress, reflecting the uncertainty surrounding risk parameters and exposure.
Before the Wall Street open, the U.S. dollar itself experienced significant fluctuations, with the U.S. Dollar Index (DXY) rapidly falling from levels not observed since the fourth quarter of the previous year.
Despite these shifts, BTC/USD continued to demonstrate resilience against abrupt movements in the DXY.
Sven Henrich, the founder of NorthmanTrader, noted that the long-term performance of the DXY chart was following expected trends.
He emphasized the importance of the U.S. dollar’s behavior, particularly in the context of the broader market, as it was likely to be a key driver for the remainder of the year.
Amidst the chaos and volatility, the DXY adhered to channel trendlines, signaling potential market dynamics that could unfold in the coming months.
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On October 3rd, Bitcoin exhibited moderate gains, rebounding from a recent dip of $1,300 as it approached the daily closing mark.
BTC’s price action revolved around the $27,500 mark, having experienced a descent from its six-week peak near $28,600, eventually finding support at $27,335 before stabilizing.
Despite the potential for the initial October breakout to be a deceptive “fakeout,” market participants remained composed.
Renowned trader Jelle expressed optimism, noting that the absence of an instant surge to $30,000 following the breakout could be seen as a positive sign, as rapid vertical movements often lead to retracements.
Daan Crypto Trades shared a similar sentiment, emphasizing the importance of a gradual climb back to previous highs for Bitcoin bulls.
He pointed out that it was essential for long traders to remain patient and wait for opportune entry points, especially during the Asian trading session.
Examining the factors contributing to the BTC price reversal, popular trader Skew highlighted the selling pressure faced by spot traders, which hindered BTC from surging beyond the $28.5K mark and ultimately triggered the sell-off.
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While some bid depth appeared to be returning, overall liquidity in the market remained relatively wide.
Previously, Skew had emphasized the increasing demands from buyers required to surpass the existing trading range, which eventually resulted in a lack of upward momentum.
Additionally, on-chain monitoring resource Material Indicators issued caution regarding downside signals on its proprietary trading tools, particularly on daily timeframes.
While these signals suggested a potential continuation of the downtrend, a decisive move above $26,800 might warrant a reconsideration.
The report also reminded readers that the cryptocurrency market had been trading within the same range for several months, emphasizing that until Bitcoin records a lower low on the weekly chart, the possibility of retesting resistance should not be ruled out.
Prior to this, renowned trader and analyst Rekt Capital had offered an optimistic perspective, suggesting that Bitcoin could potentially surge beyond $29,000 before resuming its current trading range.
Overall, Bitcoin’s price movements continued to captivate the attention of traders and analysts alike as they assessed its short-term and long-term potential.
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Bitwise Asset Management is making significant moves in the world of cryptocurrency investment, with revisions to its spot Bitcoin (BTC) exchange-traded fund (ETF) application and the confirmation of trading commencement for two Ether (ETH) futures ETFs set for October 2nd.
The company’s forthcoming offerings include the Bitwise Ethereum Strategy ETF and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF, aimed at providing investors access to the Chicago Mercantile Exchange Ether futures.
Matt Hougan, the firm’s Chief Investment Officer, emphasized Ethereum’s broader investment potential compared to Bitcoin, describing it as an asset that appeals to both alternative and traditional growth investors due to its versatile attributes.
Interestingly, Bitwise is not alone in its pursuit of Ethereum-based ETFs. Invesco, another asset management giant, is exploring the introduction of the Invesco Galaxy Ethereum ETF, indicating the growing interest in Ethereum-focused investment products.
However, a cloud of uncertainty looms over the approval of spot Bitcoin ETF applications from Bitwise, BlackRock, Invesco, and Valkyrie by the United States Securities and Exchange Commission (SEC).
The SEC has yet to make a decision, partly due to the threat of a U.S. government shutdown.
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Moreover, the outcome of the Grayscale lawsuit adds another layer of complexity.
This lawsuit involves the transformation of the Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF. A U.S. court’s decision on August 29th paved the way for the approval of the Grayscale spot Bitcoin ETF by dismissing the SEC’s objections.
This development could influence the SEC’s decision regarding spot Bitcoin ETF applications.
In parallel, Bloomberg analyst James Seyffart has unveiled a roster of nine Ethereum Futures ETFs that are poised to receive expedited approval from the SEC, with a launch date set for October 2, 2023.
This signals a growing interest in Ethereum futures as an investment avenue.
In conclusion, Bitwise’s strategic moves in the cryptocurrency ETF space, coupled with Invesco’s foray into Ethereum ETFs, underscore the evolving landscape of crypto investments.
The fate of spot Bitcoin ETFs remains uncertain, hinging on regulatory decisions and legal developments.
Meanwhile, Ethereum’s prominence continues to rise, attracting investors seeking diversified opportunities in the cryptocurrency market.
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The United States Securities and Exchange Commission (SEC) has opted to postpone its ruling on a series of proposals concerning spot Bitcoin exchange-traded funds (ETFs).
Notably, BlackRock’s ETF proposal is among those affected, and this delay comes ahead of an anticipated government shutdown.
In addition to BlackRock, the SEC has also extended the waiting period for spot Bitcoin ETF applications submitted by Invesco, Bitwise, and Valkyrie.
These postponements were officially disclosed in separate filings made on September 28.
Notably, Bloomberg ETF analyst James Seyffart anticipates that the applications filed by Fidelity, VanEck, and WisdomTree will likely encounter similar delays at the hands of the securities regulator.
These recent delays have materialized roughly two weeks ahead of the originally scheduled second deadline.
Many applicants were expecting a response from the securities regulator between October 16 and 19. The timing of these delays appears to be closely linked to the looming prospect of a U.S. government “shutdown” set to occur on October 1.
Such an event would disrupt the functioning of the country’s financial regulators and various other federal agencies.
The root cause of these delays lies in the fact that both chambers of Congress, the House, and Senate, have yet to reach an agreement on several funding bills essential for the government’s operational activities.
To avoid a shutdown, Congress must successfully pass 12 separate full-year funding bills by the impending deadline of October 1.
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It’s important to note that this isn’t the first time the SEC has postponed spot Bitcoin ETF applications.
A similar postponement occurred in late August as the initial deadline approached. Looking ahead, the third set of deadlines for these seven firms is scheduled around mid-January.
However, they, too, may encounter further delays. Regardless, the SEC must make a definitive decision no later than mid-March.
In a related development from late August, Bloomberg ETF analyst Eric Balchunas revised his estimation regarding the likelihood of a spot Bitcoin ETF gaining approval by the close of 2023.
He increased the probability from an earlier estimate of 65% to 75%.
Balchunas attributed this heightened likelihood to the unanimous and decisive ruling by the U.S. Court of Appeals Circuit in favor of Grayscale in their legal battle against the SEC.
Furthermore, Balchunas raised these odds to an even more optimistic 95% by the end of 2024, reflecting a growing sense of optimism regarding the potential regulatory approval of a spot Bitcoin ETF.
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A new legislative proposal has surfaced in the United States that seeks to enhance oversight and transparency within the cryptocurrency industry. U.S.
Representative Don Beyer unveiled the “Off-Chain Digital Commodity Transaction Reporting Act” on September 28.
This groundbreaking legislation mandates that cryptocurrency service providers report all blockchain transactions to a government-designated repository registered with the Commodity Futures Trading Commission (CFTC).
The primary objective of this legislation is to safeguard cryptocurrency investors from potential disputes, manipulation, or fraudulent activities arising from transactions conducted off-chain or beyond the purview of the blockchain network.
Unlike on-chain transactions that are instantaneously recorded on the blockchain, off-chain cryptocurrency transactions traverse secondary layers, making tracking and monitoring more challenging.
This issue has gained prominence due to the proliferation of trading platforms that aim to expedite transaction processing times while reducing costs.
Thousands of transactions now occur “off-chain,” eluding public visibility on the blockchain.
Representative Beyer emphasized the discrepancies in internal record-keeping among these private entities, underscoring the vulnerability of investors and consumers to fraudulent practices.
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In his statement, Representative Beyer articulated the legislation’s purpose: “This bill is a common-sense measure to restore some transparency and confidence to the digital asset market.”
According to the bill’s provisions, cryptocurrency service providers will be obliged to report all off-chain transactions within a 24-hour window to a CFTC-registered trade repository.
Notably, these requirements parallel the rules governing “virtually all securities and swaps transactions.”
This legislative move reflects a broader trend of U.S. lawmakers actively addressing cryptocurrency regulations.
In mid-September, nine U.S. senators threw their support behind Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act, which was reintroduced in July 2023.
The bill seeks to clamp down on noncustodial digital wallets and extend the responsibilities outlined in the Bank Secrecy Act to tackle the illicit use of digital currencies.
These collective efforts underscore the growing recognition of the need for robust regulatory frameworks to govern the cryptocurrency space and protect the interests of investors and consumers alike.
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On September 27, Bitcoin made a notable upward move, coinciding with the opening of Wall Street.
This surge in Bitcoin’s price saw it climb to $26,823 on the Bitstamp exchange, marking a 2% increase and reaching weekly highs.
Market analysts had already been keeping a close watch on the cryptocurrency’s price movement, anticipating the possibility of a breakout.
One prominent trader known as Skew pointed out that the liquidity for purchasing Bitcoin was relatively thin at the moment, suggesting that a further upward move might come from perpetual contracts (perps).
This situation could potentially create opportunities due to inefficiencies and potential premiums in the market.
Additionally, on-chain monitoring data from Material Indicators revealed increased activity among a specific class of whales known for their influence on Bitcoin’s price.
This development was seen as a positive sign for Bitcoin’s price action.
Material Indicators also highlighted that Bitcoin’s move above the $26,500 mark had invalidated a warning signal triggered by a “death cross” on the daily chart earlier in the week.
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Keith Alan, co-founder of Material Indicators, expressed confidence in following the trading strategies of these influential whales, stating, “Purple buys dips and sells rips. I’m happy to swim in their wake.”
Renowned analyst Michaël van de Poppe shared his insights, suggesting that if Bitcoin could maintain its price above $26,500, there was a strong likelihood of it reaching $30,000 by October.
Data from the monitoring resource CoinGlass showed that short liquidations in the Bitcoin market remained relatively low.
Around $13 million worth of Bitcoin shorts were liquidated on that day, contributing to a total cross-crypto liquidation amount of $39 million.
At the time of writing, Bitcoin was trading at approximately $26,700, demonstrating ongoing volatility in the cryptocurrency market.
As Bitcoin continued to show strength and resilience, many traders and investors remained optimistic about its potential for further gains in the near future.
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Despite concerns that Bitcoin Ordinals are causing network congestion, there is limited evidence to support the idea that inscriptions are displacing higher-value Bitcoin monetary transfers, according to the recent report by on-chain analytics firm Glassnode on September 25.
The primary reason for this phenomenon is that inscription users often opt for low fee rates, showing a willingness to wait for longer confirmation times.
In essence, they are choosing to buy and utilize the cheapest available blockspace, making them more susceptible to being displaced by more time-sensitive monetary transfers.
Introduced in February 2023, Bitcoin Ordinals have become the dominant force in terms of daily transaction count on the Bitcoin network.
However, this hasn’t translated directly into a substantial share of mining fees, accounting for only approximately 20% of Bitcoin transaction fees, as observed by Glassnode.
While inscriptions have increased the baseline demand for blockspace and subsequently raised fees for miners, there has also been a notable 50% increase in Bitcoin’s hash rate since February.
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This heightened competition among miners for fee revenue, combined with the impending halving event, is putting pressure on their profitability unless Bitcoin prices experience a significant increase in the near future.
Currently trading at $26,216, Bitcoin’s price is expected to appreciate to some extent leading up to the scheduled halving event in April 2024, as anticipated by industry experts.
It’s worth noting that the majority of inscriptions are linked to BRC-20 tokens, introduced just one month after Casey Rodarmor launched the Ordinals protocol on Bitcoin in February.
On September 25, Rodarmor proposed “Runes” as a potential alternative to BRC-20 tokens.
He suggested that an unspent transaction output-based fungible token protocol like Runes would help reduce the accumulation of “junk” unspent transaction outputs on the Bitcoin network, potentially alleviating some of the concerns surrounding Bitcoin Ordinals and their impact on network congestion.
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The impending $3 billion Bitcoin monthly options expiration on September 29th looms large, potentially impacting the critical $26,000 support level.
On one hand, Bitcoin’s recognition in China seems to be growing stronger, as a Shanghai Court recognized digital currencies as unique and non-replicable in a recent judicial report.
However, on the flip side, Bitcoin’s spot exchange trading volumes have reached a five-year low, attributed to increasing concerns about the macroeconomic outlook.
Cauê Oliveira, an analyst at CryptoQuant, highlighted this decline in trading activity.
Reduced trading volume poses a risk of unexpected volatility, especially in the face of liquidations in derivative contracts.
Adding to the uncertainty, traditional financial institutions like JPMorgan Chase are increasingly wary of handling crypto-related payments, as they aim to guard against fraudulent activities.
Furthermore, Bitcoin holders are on edge as the Dollar Strength Index (DXY) reached its highest level in ten months, standing at 106 on September 26th.
Historically, the DXY’s ascent correlates with risk-off behavior among investors, indicating a preference for cash positions.
The open interest for the September 29th options expiration stands at $3 billion, though expectations of Bitcoin reaching $27,000 or higher may result in a lower final amount.
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This bullish sentiment may have been bolstered by the unsuccessful attempt to break above $27,200 on September 19th, potentially breeding overconfidence.
Examining the put-to-call ratio, there’s an imbalance between the $1.9 billion in call open interest and the $1.1 billion in put options.
However, if Bitcoin’s price hovers around $26,300 at 8:00 am UTC on September 25th, only $120 million worth of call options will be viable, rendering higher-priced call options useless if BTC’s price remains below those levels on expiry.
Given the current price action, four likely scenarios emerge, each with varying numbers of options contracts available for call and put instruments.
The net result tilts in favor of put instruments in most scenarios, potentially signaling a bearish sentiment.
In conclusion, the odds of Bitcoin’s price dropping below $26,000 by September 29th seem high, particularly considering the recent market dynamics, investor sentiment, and the options landscape.
However, this analysis doesn’t account for more complex investment strategies, and market dynamics can change rapidly, so investors should closely monitor the situation in the coming days.
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MicroStrategy Bolsters Bullish Stance on Bitcoin with $147.3 Million BTC Purchase
MicroStrategy, a prominent player in the business intelligence sector and a significant Bitcoin investor, recently sent a bullish signal to the cryptocurrency market.
The firm’s co-founder and executive chairman, Michael Saylor, announced on September 25th the acquisition of an additional 5,445 Bitcoins (BTC).
This substantial purchase was executed using $147.3 million in cash and came at an average price of $27,053 per BTC.
This strategic move was disclosed through a Form 8-K filing with the United States Securities and Exchange Commission, indicating that MicroStrategy and its subsidiaries made this acquisition between August 1st and September 24th.
As of the latter date, the company’s total Bitcoin holdings, including previous acquisitions, reached an impressive 158,245 BTC.
The average purchase price per Bitcoin, considering fees and expenses, stood at approximately $29,582, culminating in a total purchase price of $4.68 billion.
This acquisition transpired against the backdrop of Bitcoin trading in a relatively sideways fashion around the $26,000 mark for several weeks.
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After briefly touching $28,000 on August 29th, Bitcoin experienced a dip to as low as $25,000 on September 11th.
At the time of this writing, Bitcoin’s price stands at $26,081, reflecting a 1.9% decline over the past 24 hours, and a roughly 4% drop over the preceding week, according to data from CoinGecko.
MicroStrategy’s latest purchase further underscores the company’s optimistic outlook on Bitcoin as a long-term investment. It follows their acquisition of 12,333 BTC for $347 million in June 2023, at an average purchase price of $29,668 per coin.
In an earlier development, MicroStrategy reported its first profitable quarter since 2020 in Q1 2023, attributed to a one-time income tax benefit.
The company subsequently maintained profitability in the following quarter, revealing a net income of $22.2 million in early August.
MicroStrategy’s continued commitment to Bitcoin not only underscores their confidence in the cryptocurrency’s potential but also positions them as a notable institutional player in the crypto space, further contributing to the ongoing evolution of the digital asset landscape.
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Arkham, a blockchain intelligence platform, recently unveiled a startling revelation: cryptocurrency giant Coinbase boasts an astonishing stash of nearly 1 million Bitcoins within its wallets.
In the current volatile crypto market, these coins carry a staggering valuation of over $25 billion.
To put this revelation into perspective, Arkham’s findings indicate that Coinbase’s holdings represent approximately 5% of the entire global Bitcoin supply.
Their meticulous analysis discerned a grand total of 947,755 BTC under Coinbase’s control, while the circulating supply of Bitcoin stands at approximately 19,493,537 according to CoinGecko, a trusted source for crypto data.
What’s more, Arkham’s investigations didn’t stop at the sheer volume of holdings.
They went on to identify a staggering 36 million Bitcoin deposit and holding addresses linked to the exchange.
In particular, Arkham pointed out that Coinbase’s largest cold wallet alone shelters around 10,000 BTC.
Remarkably, the intelligence experts at Arkham speculate that Coinbase might have undisclosed Bitcoin holdings that remain off the radar, eluding identification.
However, there’s a twist in the tale. Despite Coinbase’s colossal BTC holdings, the exchange technically only “owns” a fraction of this digital goldmine.
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In fact, recent data shows that Coinbase has direct ownership of roughly 10,000 of the Bitcoins it houses, which translates to a value of approximately $200 million.
This revelation highlights the complex dynamics of cryptocurrency exchanges and their role as custodians of user assets.
The cryptocurrency community erupted in a flurry of reactions upon learning about Coinbase’s substantial Bitcoin reserves.
Some individuals took it as a warning sign, advocating for the withdrawal of BTC from centralized exchanges, cautioning against waiting until withdrawals are suspended.
Others argued that concerns surrounding the security of cold wallets make it challenging for holders to find a truly safe storage solution for their digital assets.
It’s worth noting that when it comes to corporate Bitcoin ownership, MicroStrategy, a business intelligence firm, continues to reign supreme.
As of the latest available data, MicroStrategy’s co-founder Michael Saylor proudly declared the company’s possession of a staggering 152,800 BTC, with a valuation exceeding $4 billion.
This further underscores the growing trend of institutional adoption of Bitcoin as a store of value.
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