Opening bell │ #38 │ 3rd December
Report highlights:
Supply demand dynamics
Bitcoin rally to all-time-high pinned in fundamental dynamics, not hype-backed politics.
Bitcoin’s gains over the past month will often be attributed to Trump’s win. However, a more compelling explanation lies in Bitcoin’s transparency. Its supply is predictable, on-chain analytics reveal exchange balances, and ETF holdings are mapped. These factors contribute to a clear supply balance: prices peak when supply is low and drop when surplus supply exists. November’s price surge was driven by fundamentals reducing market supply by over 200k BTC in just 30 days – more than has been minted by miners all year. Cash flows win, not hype.
SMA downside risk
Upside gains ‘hot zone’ in view as second wave of downside risk heats up.
The 200-week simple moving average (SMA) is a favored metric among Bitcoin investors. Bitcoin rarely falls below this line, and after setting new highs, it consistently reverts to it, signaling a buying opportunity. While spot ETF dynamics could alter this pattern, it’s reasonable to assume the trend persists. Historically, Bitcoin peaks coincide with 80-90% potential drawdowns to the SMA. Currently, downside risk is only slightly above March’s record at roughly 55%. A slower approach to surpassing $100,000 reduces downside risk over time and makes investment thesis powerful. So why the rush?
Bitcoin
Two yards shy: will ETF flows push Bitcoin over the $100,000 mark?
The crypto world is abuzz with anticipation for Bitcoin to hit the $100,000 milestone. Memories of 2017’s near-miss at $20k —and the bear market that followed—linger like a cautionary tale. Yet, the numbers now tell a more hopeful story. If ETF flows attract around $1.9bn, enough to purchase an additional 20,000 BTC, this watershed moment could arrive within a week or two from the current ETF holding levels of 1.08mn. Every 10k BTC added by ETFs has driven a 2.2% price increase. The finish line is near.
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Technical indicators
Momentum giving Bitcoin’s RSI another try for longevity.
The Relative Strength Index (RSI), a key tool for traders, measures whether Bitcoin is overbought or oversold at current price levels While it isn’t known for pinpoint accuracy, Bitcoin only peaks after extended periods in the overbought zone. In 2013, Bitcoin stayed overbought for 10 months. The entire year of 2017 saw similar conditions, while 2021 marked six months in the zone. This year, Bitcoin has spent only two months in overbought but is now entering its third, potentially signaling the start of another prolonged rally.
Supply demand dynamics
Fresh cash, Binance market share of Tether USDT on exchanges hits new record.
Tether’s market cap has soared from $92 billion at the start of the year to over $134 billion today. Out of this total circulating supply, $36 billion is currently held on cryptocurrency exchanges, with Binance accounting for nearly $25 billion—an impressive 68% of all exchange-held USDT. Most of this inflow occurred after the U.S. elections, with over $14 billion entering exchanges in the past month. Intriguingly, this mirrors Tether’s new minting during the same period, suggesting this could be fresh capital entering the market. And it's parked to work.
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