Crypto Market Analytics 7th December 2022

BTC and ETH TL;DR

Bitcoin & Ethereum are up 4.86% & 11.21%, respectively, over the past fortnight. Greythorn views that Bitcoin will range between $16,000 and $19,000 over the upcoming week based on our option flow model.

GREYTHORN OPTION FLOW MODEL

Following the sideway movements in the second half of the last week, Bitcoin opened higher at $17,113 compared with that of the past fortnight due to Powell’s comments regarding the potential slowdown of rate hikes.

Increased volatility is expected at a series of price levels with negative option supply, namely the interval between $12,000 and $15,500, as well as $16,250 to $16,750.

• If price decreases, $17,000 is the first strong support, followed by $16,000 as the second.
• If price increases, it will move further into the resistance zone between $17,250 and $23,000. In other words, it will take time for the price to significantly increase within this zone of liquidity provision.

Gamma Supply turned negative to positive, indicating a flatter market expected over the upcoming week. This is pronounced by the magnitude of liquidity provision at $17,250 and $18,000.

Taking note of several fundamental economic indicators such as US Crude Oil Inventories and Initial Jobless Claims set to be released on Thursday & Friday, along with Japanese GDP, a potential move away from $17,000 remains possible. ECB President Lagarde will deliver three speeches, which may hint at further policy guidance for the Eurozone going into the new year.

Greythorn believes that Bitcoin will range between $16,000 and $19,000 over the upcoming week based on our option flow model.

For an introduction to Greythorn Option Flow Model, please refer to our newsletter from 8th June 2022. https://greythorn.substack.com/p/greythorn-asset-management-newsletter

DISCLAIMER

Greythorn’s view of markets is significantly dependent on supply & demand mechanics. As crypto markets mature & attract large flows of capital, their derivatives markets also grow. Derivatives markets tend to have a large influence on their underlying assets as market participants tend to hedge their exposure through spot & futures markets. Our proprietary option flow model has been developed in-house to inform our judgement regarding how positioning across derivatives markets may influence the movement of Bitcoin.