November 13 Bitfinex Alpha | BTC is rising in value, but be careful what you wish for
In Bitfinex Alpha
In a strong week, Bitcoin peaked at $38,000, its highest point since May 2022, before reversing some of its gains. Even at current levels of $37,000, the average purchase price for short holders – the Short Term Holder Realized Price (STH RP) – is around $30,380. This gap between STH RP and the current market price is at its clearest since April 2022.
However, based on historical performance, such a move in STH's business plan on a monthly basis shows that there is a need for caution. Analysis of short-term and long-term holder groups shows that historically, when there is a $2,000 monthly change in STH RP, combined with a negative shift in the average buy price for long-term holders (also currently taking place), it indicates To the possibility of reaching a local peak, which will likely be followed by a decline to test the STH RP level. At current levels, this suggests that the price could theoretically fall to a range between $30,000 and $31,000.
It is worth noting that market volatility is also high: the recent rise to $38,000 was accompanied by significant market liquidations amounting to $491 million on November 9 alone – the highest level since August 17. We suggest that it would be wise to exercise caution in the current circumstances.
In the broader economy, the availability of credit and lending standards have tightened, affecting businesses and consumers alike. However, we see these conditions gradually easing over time, reflecting lower demand for loans, as higher interest rates continue to have an impact.
This situation is further exacerbated by a significant rise in household debt, which rose 1.3% in the third quarter, pushing total debt to $17.29 trillion. The largest annual increase in credit card balances since 1999 — a 4.7 percent increase in credit card borrowing — is one factor contributing to this increase. This rise in credit use indicates an increasing reliance on debt amid financial pressures.
Although the labor market is showing resilience, it is also showing signs of gradual weakness. There has been a notable increase in continuing unemployment claims, indicating increased difficulties in finding new jobs for those receiving unemployment benefits.
Adding to these economic challenges is a decline in consumer sentiment, which has now reached its lowest levels since May. This decline adds another layer of complexity to the economic outlook.
On the news agenda – and one of the catalysts behind Bitcoin's recent sharp rise – is the introduction by BlackRock, the world's largest asset manager, of an exchange-traded fund (ETF) based on Ethereum (ETH). This news also led to a temporary spike in the price of ETH, pushing it to around $2,100.
More good news about the utility of blockchain came when JPMorgan announced that it had introduced programmable payments within its JPM Coin system, which will allow for automated, fast transactions for institutional clients, when certain conditions are met.
Also on the payments front, Dtcpay, a Singapore-based company, announced the launch of a new payment system that supports fiat assets and cryptocurrencies including Tether, Ether, and Bitcoin. The new system is designed to be convenient for in-store and online transactions.
Finally, FTX filed a lawsuit against Bybit, to recover approximately $953 million in assets that the company withdrew, just before FTX collapsed. The news sparked a sharp increase in FTX's FTT token.
For once, a positive news week. Happy trading!