October 9th Bitfinex Alpha | As volatility rises, Bitcoin flows into long-term holders.
On Bitfinex Alpha
The Bitcoin landscape has witnessed significant changes in investor dynamics. Short-term Bitcoin supply has decreased by nearly 1 million BTC since April 13, 2023, while long-term holder (LTH) supply has increased by over 1 million BTC during the same period. This supply shift confirms that the market is increasingly shifting in favor of long-term investors.
Bitcoin’s volatility began significantly in October. Historical 24-hour volatility increased by more than 340% on October 2nd, and this is expected to continue for at least the remainder of the month. Looking at the BTC options market, we see that implied volatility remains higher than historical volatility and is consistent with similar volatility seen in US equities.
That said, we are also seeing interesting developments in the process of decoupling the correlation between BTC and major US indices. BTC appears to have almost completely lost its correlation with stocks, as evidenced by the fact that the price of BTC reached the bottom of its current range somewhat ahead of the S&P 500 index. The S&P 500 index has just rebounded from the 4,200-point level.
Although we continue to see mixed signals from across the economy, we think a soft landing is looking increasingly likely.
The housing market continues to show signs of stress, including a decline in mortgage applications and a decline in pending home sales. In contrast, the U.S. manufacturing sector finally appears to be recovering, with the Purchasing Managers Manufacturing subindex expanding for the first time in nearly a year. .
However, the U.S. job market is showing some signs of slowing down. Although jobs have increased and employment has surged, there are subtle signs that the basis for growth is not necessarily sustainable. For example, much of the job growth can be attributed to seasonal, holiday-related hiring. Moreover, full-time employment in the United States is declining.
The news flow in the cryptocurrency world is also diverse. Ripple’s
However, this positive news was tempered by the announcement that Stars Arena, an Avalanche-based SocialFi platform, suffered a security breach that resulted in the loss of nearly $3 million in AVAX tokens. It later announced that it had raised enough funds to offset its losses, but that doesn’t provide relief to advocates of these decentralized platforms. Meanwhile, Thorswap was forced to resort to “maintenance mode” after detecting illegal transactions traced to the FTX hack, which caused its native token RUNE to plummet 9%. Criticism grew as the platform suspended trading operations.
Have a great trading week!