Bitcoin Market Analysis - January Part 2

Written by Greythorn Asset Management
27 Jan 2023
8 mins read


  • Bitcoin & Ethereum are up 8.90% and 0.19%, respectively, over the past fortnight.
  • Greythorn views that Bitcoin will range between $20,000 and $25,000 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 250123. Source: Proprietary - Greythorn Research Team. Data: Laevitas.

After a strong start to 2023 with an 8% gain solely from last week, Bitcoin is trading at levels last seen in August 2022. The weekly opening price, $22,708, is ~$5,000 higher than what it was two weeks ago. Based on the GEX chart, BTC’s trading range is getting narrower with new areas of support being formed.

Increased volatility is expected at a series of price levels that have negative Net GEX, namely $21,000 and $24,000. 

If the price decreases, $22,000 is the first strong support level, followed by $20,000 as the second support to prevent the price from tumbling further. If the price increases, $23,000 would be the first resistance level it meets. The second powerful resistance can be found at $23,500, while the interval between $25,000 and $30,000 can be regarded as a resistance zone should the price goes up further. 

The value of Net GEX becomes more positive, which indicates a flatter market is expected for the upcoming week. Considering US GDP data is to be posted on Friday, along with ECB President Lagarde’s speech planned on the same day, uncertainties can be introduced to the crypto market in the foreseeable future. Together with several other fundamental economic indicators, such as US Crude Oil Inventories on Thursday and Initial Jobless Claims on Friday, whether the Bitcoin market would still move sideways afterwards is questionable. 

Greythorn believes that Bitcoin will range between $20,000 and $25,000 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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