Bitcoin Market Analysis – February Part 1

February 8, 2023


  • Bitcoin & Ethereum are up 2.47% and 2.77%, respectively, over the past fortnight.
  • Greythorn views that Bitcoin will range between $20,000 and $24,000 over the upcoming week based on our option flow model. 

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. 

Figure 1: Greythorn Option Flow Model 080223. Source: Proprietary – Greythorn Research Team. Data: Laevitas.

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

Important notice and disclaimer

This presentation has been prepared by Greythorn Asset Management Pty Ltd (ABN 96 621 995 659) (Greythorn). The information in this presentation should be regarded as general information only rather than investment advice and financial advice. It is not an advertisement nor is it a solicitation or an offer to buy or sell any financial instruments or to participate in any particular trading strategy. In preparing this document Greythorn did not take into account the investment objectives, financial circumstance or particular needs of any recipient who receives or reads it. Before making any investment decisions, recipients of this presentation should consider their own personal circumstances and seek professional advice from their accountant, lawyer or other professional adviser. This presentation contains statements, opinions, projections, forecasts and other material (forward looking statements), based on various assumptions. Greythorn is not obliged to update the information. Those assumptions may or may not prove to be correct. None of Greythorn, its officers, employees, agents, advisers or any other person named in this presentation makes any representation as to the accuracy or likelihood of fulfilment of any forward looking statements or any of the assumptions upon which they are based. Greythorn and its officers, employees, agents and advisers give no warranty, representation or guarantee as to the accuracy, completeness or reliability of the information contained in this presentation. None of Greythorn and its officers, employees, agents and advisers accept, to the extent permitted by law, responsibility for any loss, claim, damages, costs or expenses arising out of, or in connection with, the information contained in this presentation. This presentation is the property of Greythorn. By receiving this presentation, the recipient agrees to keep its content confidential and agrees not to copy, supply, disseminate or disclose any information in relation to its content without written consent.

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