Bitcoin Market Analysis- July Part 1

July 5, 2023


  • Bitcoin & Ethereum are up by 7.17% & 3.06%, respectively, over the past fortnight.
  • Greythorn views that Bitcoin will trade between $29,000 and $34,000 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 030723. Source: Proprietary – Greythorn Research Team. Data: Deribit

Bitcoin broke past $30,000 for the second time since April this year as investors continue to build on the spot ETF narrative fuelled by large bids from MicroStrategy. Over the weekend, Bitcoin held its position above $30,000 and opened at $30,616 for the week.

From the perspective of options supply, increased volatility can be expected at several price levels, including $30,000, $32,000, $33,000, and $35,000.

If the price decreases, $29,000 is the first and only weak support level. 

If the price rises further to the upside, $31,000 is the first significant resistance, followed by $31,500 as the second. Should Bitcoin successfully move past these two levels, $32,500, $34,000, and the interval between $36,000 and $40,000 are the following relatively weak resistance levels.

Gamma supply is ~40% higher than that of two weeks ago, suggesting a relatively stable market for this week. Liquidity provision has continued to dominate for the third consecutive fortnight, particularly at $31,000. 

A range of economic indicators from the US is set for later this week, with the potential for any heightened volatility to flow over to digital asset markets.

  • ISM PMIs: Manufacturing, Services, and Non-manufacturing will be published on Wednesday, Thursday, and Friday, respectively. 
  • Employment Data: Initial Jobless Claims on Wednesday, JOLTs Job Openings on Thursday, and Unemployment on Friday.
  • Crude Oil Inventories are also set to be released on Friday. 

Greythorn believes that Bitcoin will trade between $29,000 & $34,000 over the upcoming week based on our option flow model.

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

The information contained within this newsletter is purely our opinion and should not be considered by readers to constitute any form of financial or investment advice. We encourage readers to conduct their own research into any financial product that they are interested in and Greythorn will not incur any liability for potential losses.

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 circumstances, 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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