BTC and ETH TL;DR
Greythorn Option 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 price temporarily decreased following the news about SVB, Bitcoin found bullish momentum over the past ten days since the market digested news about the support from the Fed & allocated into blue chip cryptos as an alternative to USDC. Opening at $28,081 this week, Bitcoin has continued to find some liquidity around this level
From the perspective of option supply, increased volatility can be expected at several price levels, including $23,500, $24,500, $26,500 and the interval between $29,000 & $30,000.
If price moves to the downside, the first support is $27,000, followed by $26,000, $25,000 and $24,000 as weaker supports. If price rises further, $28,500 is a weak resistance, and the interval between $31,000 and $35,000 can be regarded as a significant resistance zone.
Option supply has increased, indicating a flatter market for the following week. Market activity has increased as observed by the magnitude of positioning at levels such as $27,000, $28,000 and $30,000.
There are several macro indicators to be released in the second half of the week, which can bring about a relative amount of uncertainty & guidance for markets going forward. British CPI, ECB President speaks, FOMC’s Interest Rate Decision & Press Conference on Wednesday; SNB Interest Rates, BoE MPC Meeting Minutes & US Initial Jobless Claims on Thursday; and PMIs for Germany & the UK on Friday.
Greythorn believes that Bitcoin will trade between $26,000 and $32,000 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
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