BTC price rose 2.1% to $35,233 in the last seven days, and the BTC market cap dominance by percentage declined from 54.32% to 53.89% in the same period.
Altcoins have outperformed BTC in the last seven days, led by Solana ($SOL). Solana posted a 30.1% gain after a successful break through the $30 level resistance.
Decentralized finance (DeFi) tokens also received enthusiastic market demand, with Uniswap (UNI) and Aave (AAVE) advancing 15% and 10%, respectively.
Sushiswap ($SUSHI) surged 84.2%, from $0.63 to $1.161 in the last 7 days. The raise caused market attention as an analyst noticed a 900,000 SUSHI token purchase on-chain with a new wallet and a subsequent movement from the same wallet to an on-chain derivative platform with a large SUSHI long position. The on-chain data suggests that the wallet owner tried to pump up the SUSHI spot price and make a profit on the SUSHI long position.
Due to the poor liquidity pools for the SUSHI token, a large-size trade on the DeFi platform could easily make a huge price impact on the market. The price effect would then transfer to other decentralized and centralized exchanges as the ripple effect. OTC (over-the-counter) trades could lower the degree of the price impact and hide the market intention.
Overall Market
The above chart shows the BTC price in 2023.
As discussed in last week's post, the blue line, which was previously the trend line support, is now the trend line resistance. At the $35k mark, Bitcoin is currently attempting to breach this blue line and get past this resistance level.
Bitcoin demonstrated strong performance and surged from $26,700 to $35,100 in 11 days after it rebounded from the red downward trend line and verified the breakout from the downward trend. The narrative of the approval of the BlackRock Bitcoin spot ETF and the acceptance of Bitcoin in the traditional finance world propelled this quick one-way movement.
Our desk witnessed the capital shift from Bitcoin to altcoins as the price of BTC struggled to overcome the resistance level at approximately $35,500. In the past few days, Solana ($SOL), a layer 1 token ranked 7th by market capitalization, has experienced a 30% increase. Strong market demand was also observed for additional large-cap layer 1 tokens, like Near ($NEAR) and Cosmos ($ATOM).
Since there isn't much resistance above the current level, if the price of bitcoin can break through the blue resistance trend line, we might see a price of $45,000 by the end of the year.
Options Market
The above table shows the at-the-money implied volatility in BTC and ETH options.
The implied volatility of both BTC and ETH spiked back above 50% following the recent wild swings in their prices.
Our desk noticed that even though ETH options' implied volatility is still lower than BTC options', the difference is closing.
Seasonality affects the price of Bitcoin because the final quarter of the year typically sees erratic fluctuations, either upward or downward. In the coming weeks, we should observe increased implied volatility on the front-end expiries in light of that expectation.
Currently, ETH's price and BTC's are highly correlated. It is unlikely that an ETH bull run will be sparked anytime soon, as there is no catalyst for the ETH price in the near term. Our desk anticipates that the implied volatility differential between the BTC and ETH options will stay at its current level.
Macro at a glance
Last Wednesday (2023-10-25)
Bank of Canada maintained its interest rate at 5.00% as expected but left the door open for further hikes amid worries over persistent inflation.
Last Thursday (2023-10-26)
European Central Bank holds its interest rate at 4.50%, as expected. The majority of underlying inflation measures are still declining, according to the Governing Council, which stated that new data supported its medium-term forecast for inflation at 2.1%. Christine Lagarde, the president of the European Central Bank, stated that although the ECB will rely on data, the committee would like to keep interest rates high enough to reduce inflation.
The US GDP is expected to grow by 4.9% in Q3, over twice as much as it did in Q2. The likelihood of one more rate hike by the Fed in December increased due to GDP growth that was stronger than anticipated. The Nasdaq index saw a 1.74% decline at the close, while the S&P 500 index finished the day down 1.18%.
On Friday (2023-10-27)
Similar to last month, the US Personal Consumption Expenditures (PCE) price index showed 3.4% year-over-year growth. In comparison to last month's 3.8%, the core PCE price index was at 3.7%. The PCE price index is closely watched by the Federal Reserve, which uses it to gauge inflation and set interest rates. However, the worsening Israel-Hamas conflict raises the price of oil, which boosts inflation and raises the likelihood that the Fed will raise interest rates in December.
On Monday (2023-10-30)
Germany's third-quarter GDP growth was predicted to be -0.1%, which was less than the predicted -0.3%. It was predicted that the CPI would increase by 3.8% year over year, which was less than last month's 4.5% and better than the predicted 4.0%.
China's manufacturing PMI was 49.5 in October, below the predicted 50.2. The market anticipates that the Chinese government will increase market capitalization and fortify its economy, given the data indicating that the country's economic activity is having difficulty rebounding.
The Bank of Japan maintains its negative interest rate at -0.1% as expected. It also considers adjusting its yield curve control (YCC) framework to allow 10-year Japanese government bond yields to rise above 1%. USD/JPY soared to 151.68, a 1.78% increase, after the news.
On Tuesday (2023-10-31)
The Eurozone CPI was projected to be 2.9%, lower than the estimated 3.1%. The ECB's pressure to raise interest rates again was lessened in October when the CPI reading dropped from 4.3% in September to 2.9%.
On Wednesday (2023-11-01)
US ISM Manufacturing PMI was reported at 46.7 in October, surprisingly lower than the estimated 49.0.
The Federal Reserve held its interest rate at 5.50% in its November FOMC meeting, as widely expected. It is the second consecutive pause on rate hikes by the Federal Reserve. Fed Chairman Jerome Powell stressed that no rate decision was made for the December meeting and no rate cut would be made anytime soon. The tightening financial and credit conditions helped bring down inflation, and the projected US GDP growth was lowered after the rate decision was made. S&P 500 index and Nasdaq index closed up 1.05% and 1.64%, respectively. The US dollar index (DXY) fell below 107 and closed at 106.67 after the FOMC meeting. The BTC price rose above $35,000 for the first time since May 2022.
Convert Portal Volume Breakdown![](https://public.bnbstatic.com/image/pgc/202311/b204691f8abe36d03f617bad4b40e853.png)
The above table shows the volume breakdown of our Convert Portal.
Due to price fluctuations on stablecoin pairs last week, the volume of stablecoin swap transactions increased by 6.5% to 13.51%. Stablecoin swap transactions saw an increase in demand as a result of the fluctuating price movement.
Our crypto-to-crypto transaction volume increased 1.44% as a result of altcoins' strong performance, which was driven by high market demand. It implies that investors are allocating capital to the outperformers and actively modifying their portfolios.
Furthermore, over the past seven days, the volume of crypto to stablecoin has decreased by nearly 7%. It suggests that investors are not taking profit from the market but allocating their capital between different crypto assets.
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