11/15/23, 11:05 AM [Crypto] Sentiment turning | Patreon

阿豬搵錢日記

[Crypto] Sentiment turning

9 hours ago
Crypto markets had an amazing month. Not only on absolute terms, but also relatively
to other asset classes. The biggest driver for the excitement is the expected
imminent approval for BTC spot ETFs. But at the same time, overall crypto has also
benefited from the decline in yields after it peaked last month.
And imagine – all this was started by a fake/wrong tweet announcing the approval of
Blackrock ETF which was denied later that day. Nonetheless, this started a broader
conversation about the potentials of the ETF. One thing led to another, and now we
are 30% higher versus a month ago. We are well underway towards our bullish thesis
for 2024, again on the back of 1, regulatory clarity given ETF approval 2, interest rate
cuts, and 3, BTC halving. We have held this view for the past 12 month and it’s starting
to materialize. Nonetheless, crypto is extremely volatile, so watch out for pullbacks
which can be violent.
The Tweet that Started it All

The above tweet was published by Cointelegraph, a prominent crypto media, on Oct
16th. It came out of no where and catalysed a violent price action in BTC where prices
shot up almost 10% in an instant hitting 30K before retracing back to around 28K
when the market realized that it was fake news.
Cointelegraph had to release a official clarification on the fake news:
https://cointelegraph.com/news/clarification-sharing-false-spot-bitcoin-etf-news,
which have liquidated significant short positions on BTC.
Despite the full day price roundtrip from the fake news, this event led to two
extremely important developments:
1. This fake news settled the debate of the impact of a BTC ETF on the price of BTC
itself. For the naysayers who argued that a BTC ETF is a non-event, or even a negative
event, this fake news triggered the 10% price increase which is conclusive proof that
the ETF is a positive price action event. And when prices of BTC fell back to 28k,
buyers of the tokens essentially had a free call option on the ETF event itself. From a
risk/reward perspective, the fake news showed the hands of the market where going
Long at these levels was a very good trade.
2. The fake news also led to a official rebuttal by Larry Fink, CEO of BlackRock, on
national TV where he said that despite it being fake: “I think it’s just an example of the
pent-up interest in crypto, and we’re
Readhearing fromyour
more from clients around the world about the
favorite Open app
need for crypto,” Fink said. “Somecreators.
of this rally is way beyond the rumor, I think the

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rally today is about a flight to quality with all the…issues around the Israeli war now
[and] global terrorism,” Fink said.
The significance of what Larry Fink said needs to be emphasised - The boss of the
largest asset manger in the world is telling the world that BTC, with a market cap of
only USD700bn, is a “flight to quality” asset which is a term usually only reserved for
US treasuries and gold. I believe that this remark was the endorsement that was the
rallying cry for all subsequent price action.
Changing Market Structure
After the Larry Fink comment, technicals for BTC changed in a very noticeable way
that’s very different from 6 month ago, such as:
Overall yields continue to rise in Oct, leading to major risk-on assets to
plummet, however BTC continued to rise
Geopolitics continued to flare however both Oil and Gold had relatively muted
performances despite that they should really benefit fundamentally.
Meanwhile, BTC outperformed both in Oct
These subtle moves were later verified by data that indeed Tradfi institutions began
to aggressively accumulate BTC. CME, the tradfi futures exchange, is now the
exchanges with the most BTC futures open interest, surpassing Binance who usually
have 50% market shares.

Market structure has changed and we are

Read moreprobably in afavorite
from your upward trending
environment. There is likely to be creators.
major bumps along the way, but overall tendency
should be move for higher. Nevertheless, technicals inflections still need

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fundamentals to carry through. We need to watch for regulatory development like the
ETF approval and interest rate direction closely.
Just now (Nov 14) – US CPI print came out cooler than expected and yields are
plummeting.
GBTC
GBTC is a trade that I've been watching for a long time and despite that discount
have narrowed from -45% from when I first mentioned to now -12%, leading GBTC to
outperform BTC itself by around 20% in the past months. Any future catalysts around
Bitcoin ETF will also help to narrow the discount further; hedged with a BTC perp
short will enable you to around 20% annualized yield on the short. This is a fairly
conservative way to play the ETF approval.

Risks
Of course there are still risks out there. The short term risk is the speed of the run-up.
After a 40% move, it’s quite possible and reasonable to expect 15-20% retracements.
In fact, the amount of leverage in the system now would make any retracement quite
quickly and painful.
The medium term risk is the timing of the ETF approval. SEC can drag their feet and
wait for the final deadline before approving. Any missed deadlines would impact
sentiment negatively. In fact Nov 17th is a date with strong expectations by market.

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The long term risk is the fact that the GBTC trust already has $22bn of BTC inside.
Once fully converted to a ETF, holders can freely redeem the BTC and sell it in the
market.
Charts
Bitcoin: strong rally after breaking out from its rectangle setup. The trend now is more
favorable than a couple months ago.

The recent strength in crypto is largely driven by Bitcoin's price movement. As you
can interpret from BTC's market cap dominance.

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ETH's price action has been weaker than Bitcoin's. It is now on the verge of breaking
out of $2100 resistance. But given the sharp 30% rally in the past month. It makes
this breakout prone to sharp pullback.

The 3rd largest cryptocurrency, BNB is noticeably weaker than the previous two. Its
50ma still below 200ma. Looks like market thinks CZ and the organization will face
tougher time ahead

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In contrast, the coin of the 2nd largest exchange (OKB) is doing much better. Given
how other risk assets and crypto traded in the past year. This chart looks almost too
good to be true. Leading me to suspect ownership of the coin is quite concentrated.

ADA: still downtrend. No setup

XRP: plagued by the SEC case for years. After the verdict came out earlier this year,
XRP's price action has turned increasingly positive.

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DOGE: nope

Solana: probably the strongest bluechip in terms of momentum. But given the 200%
advance, sharp pullbacks is to be expected.

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Disclaimer: The content of this post is solely for entertainment and not investment
creators.
advice. Any views expressed in the below are the personal views of the author and

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should not form the basis for making investment decisions, nor be construed as a
recommendation or advice to engage in investment transactions

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