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Analysts' Insights

Analysts' Insights

Mystery Buyers Snatch Up Bitcoin

👇 1) The last 30 days have been driven by the Binance-SEC lawsuit and its repercussions, such as Binance.US losing banking access and Binance retreating from seeking regulatory approval in various jurisdictions (UK, Netherlands, etc.). The last week was driven by the perception that “big” institutions would enter the Bitcoin ETF market and provide regulatory crypto exchange services.

👇 2) During those 30 days, Bitcoin prices have rallied by +10% (blue line in the chart). During Asia trading hours, Bitcoin prices have declined by -7% (green line), mainly driven by the Binance news and then never really picking up. This flow data analysis confirms the poor sentiment that our “Hong Kong Crypto Sentiment Index” was projecting (see the post from Monday).

👇 3) The buy flow during US trading hours has been consistently positive, with a material pick-up during the last week. Bitcoin prices are up +16% during US trading hours (blue line). This is a strong indication that crypto is not DEAD in the US.

👇 4) Quite the contrary, especially if those Bitcoin ETFs are getting their approval from the SEC, which we believe is quite likely.

👇 5) Bitcoin has rallied +1% during European hours (red line), but what is more important to know is that Bitcoin’s volatility is very narrow during European trading hours – as if Europe is not contributing to the price discovery of Bitcoin.

👇 6) What counts is Asia and especially the US. Crypto is not dead in the US.

👇 7) Ethereum underperformed last month, rallying only +2%. Ethereum rallied by +9% during US trading hours, while prices dropped by -7% during Asia trading hours.

👇 8) The two narratives that have contributed to Bitcoin’s +80% rally year-to-date have been 1) expectations that the Fed would stop hiking rates (Jan-May 2023) and, from June onwards, 2) that “big” institutions would drive Bitcoin adoption through their ETF offerings. Both narratives can support prices into year-end.

👇 9) During the 2017 bull market, the CME futures exchanges offered institutional investors access to Bitcoin, a key driver for the bull market. We can see a repeat of that momentum carrying over into prices.

👇 10) The flows during US trading hours indicate that US institutions with access to the Bitcoin market are already buying. The plan could be to sell to those ETF holders once Blackrock can list it. While our Greed & Fear sentiment index is exuberant and expects price consolidation in the near term, the year-end price target we set on February 1, when Bitcoin was trading at 22,000, stands / remains at 45,000.

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