Market Update 10/27

MARKET OVERVIEW

Welcome to Uptober - the second largest Bitcoin rally in the last twelve months, with BTC rallying 26.7%, before retreating to $33,975 comparing to March 20th 2023 of 37.65%. The week ending on October 27th, ensued with lots of optimism surrounding Bitcoin spot Exchange Traded Products being approved and the presidential election in Argentina, leading to a run off between a pro Bitcoin populist candidate versus the establishment. Economy Minister Sergio Massa came in first place over right-wing populist Javier Milei, who had led in the polls. The runoff on November 19 will now pit Massa, an established politician who has promised to form a unity government, against the libertarian Milei, who has called for far-reaching change in policies to prop up an Argentine economy, including abolishing of the Argentinian central bank, and abolishing the Peso. Argentina's inflation rate hit 138% annually in September and is still rising, with prices climbing above 12% the two most recent months.

For the week, Bitcoin (19.56%), along with Ethereum (13.35%), Solana (27.20%), Dogecoin (20.56%), rallied - while Chainlink saw a biggest change of 42.85%. Cryptocurrency total market capitalization increased to $ 1.26 trillion. The two major cryptocurrencies trended upwards as Bitcoin (resistance) $35,050 and (support) $26,641 and Ethereum $1,855 (resistance) and $1,566 (support). Bitcoin daily volume on the day is $22.55 billion and Ethereum daily volume $ 11.43 billion, almost twice the amount versus the previous week.

BTC and ETH total market capitalizations are equaling $663 billion and $213 billion: indicating 3.1127x ratio, increase from 2.9825x ratio on 10/20. Bitcoin dominance continuous on the news of a possible publically traded product being approved, allegedly with BlackRock Asset Management already seeding the fund with APs.

Notable news surround Coinbase - Staking as a Service product, that we highlighted previous week, The SEC is presently investigating cbETH liquid stake derivatives as the unregistered securities offering. Coinbase stock rallied from $73.10 price per share, to mid week high of $82.07, before retreating to $75.99 - clipping 3.95% gain on the week.

BITCOIN FUTURES

The Futures Markets on CME had a daily Open Interest (totals) 6,639 contracts, price of $34,840 for month end October (Ticker: BTCV3) and BTC futs recalibrated to trade in a relatively flat structure . The aggregate CME contract volumes for the remainder of 2023 are 21,288 contracts with the futures curve with ME November (+ $375), December (+ $475) and January 2024 (+ $1,070). Bitcoin futures, Volume and Open Interest for the week ending on October 2023, is higher than on September 2023 with a big spike in the amount of contracts traded on October 23th , 24th and 25th.

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c1 Bitcoin (trailing) 180 days

c2 BTC/ETH (trailing) 7 days

TECHNICAL ANALYSIS

The volume adjusted indicators for BTC cryptocurrency, including Accumulation Distribution Line and the Sharpe Ratio, including BTC/ETH ratio are reported on chart 1 and chart 2 for week the ending on October 27th.

#Bitcoin
○ A/D Ratio - Accumulation Distribution Indicator or ADL (Accumulation Distribution Line) is a volume based indicator that aims to measure the underlying buying / selling pressure by combining money index multiplier with traded volume. For the period of trailing 3 months - Bitcoin price of $33,965 punched through ADL line $ 32,285 that might suggest overbought territory. The traders are possibly distributing (selling) at the higher levels, so ADL can reveal divergence between volume flow and actual price.

○ Money Index Flow (31 day)- or The Money Flow Multiplier is determined by the relationship between a period’s closing price and the period’s high/low range, adjusted for 31 days, trailing. For this week, we're not reporting MIF.

○ Sharpe Ratio (31 Day) - The Bitcoin SR is the performance adjusted return for the risk free rate (5%) / divided by the standard deviation of return for the period. The week ending in October 27th has SR of 0.025 for the past 30 days, comparing to last week SR of 2.75. Please note that Sharpe Ratio take into account volatility in the denominator, even as we see spike in BTC price, so does a level of risk.

#Ethereum
○ $BTC / $ETH ratio reached another low for this week, with ETH failing to keep up with BTC rally, right on October 23rd at a time when Bitcoin rally took off. ETH is trading down on the week at 0.0522 down from 0.0545 per BTC. Ethereum fell nearly 8.00% over the past 7 days, from 6.00% in the past week.