BTC and ETH TL;DR
Greythorn Flow Model:
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.
After the growing momentum over January, Bitcoin has drifted sideways with a slight pullback over the past fortnight. Opening at ~$23,000, the market is back at the same level it was at two weeks ago.
Looking at gamma supply, we can expect increased volatility at $21,000, $22,000 & $25,000.
If price decreases, $22,000 & $20,000 are the only weak supports. In contrast, the upside resistances are much more significant. $23,500 is the first resistance, while $24,000 is even more substantial. The entire interval between $25,000 and $30,000 is currently positioned as an area of ample liquidity provision.
While option supply remains positive, it has decreased from the previous fortnight. Considering German CPI is to be released on Thursday, along with UK GDP data on Friday & the upcoming EU Leaders Summit, uncertainty from Europe can potentially influence crypto markets during the second half of this week.
Greythorn believes that Bitcoin will range between $20,000 and $24,000 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
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