After hitting all-time highs (ATHs) near USD 99,700 last week, BTC has been consolidating. A slight pullback on Tuesday brought it close to USD 90,000, driven by two consecutive days of outflows exceeding USD 500 million from BTC spot ETFs. However, the dip was quickly bought up, pushing prices back above USD 97,000 before settling around USD 96,000. This morning’s major options expiry on Deribit (USD 9.3 billion notional) set the tone, with USD 100,000 as a key resistance and USD 95,000 as initial support, followed by USD 90,000. I expect BTC to stay in the range between USD 90,000 and USD 100,000 for now. For long-term believers, dips below USD 95,000 are solid buying opportunities, with levels under USD 90,000 being even more attractive before we eventually break above USD 100,000.
Bitcoin dominance came back from its high around 61.8% last week to 58.2% this morning (mostly led by ETH outperformance) indicating a possible start of an altcoin rally. However, this has yet to be confirmed, and in the past these movements have reversed.
ETHBTC again began to recover and outperform (ETH started flirting with the USD 3,700 level), testing 0.038, and currently trading above 0.037. The move looks healthier than its sharp squeeze at the beginning of November. However, as long as we do not break above daily 100 EMA bands with a daily close, or, to simplify, above 0.04 – I would not rush to switch long-term spot into ETH. That said, it might be a good short to medium-term trade to play the ETH catch up.
SOLETH showed some weakness this week, but as long as it holds above 0.063 on a daily close, the long-term trend will continue favouring SOL over ETH. ETH is currently finding support around USD 3,500, with the next resistance levels at USD 3,800 and USD 4,000. ETH beta names such as LDO, ENS, and AAVE led gains earlier this week but have underperformed this morning as ETH consolidates, while other sectors, such as AI coins, are showing stronger momentum.
Regulatory news out of the US leans bullish: courts ruled OFAC overreached in its sanctioning of the Tornado Cash’s smart contract, stating autonomous code is not property. Tornado Cash’s token is up more than 300% WoW). In the meantime, media reports suggest that the Trump administration will assign the CFTC, not the SEC, to regulate digital assets.
BTC’s 30-day at-the-money (ATM) implied volatility decreased from around 62% to 56% (-6% WoW), while ETH’s ATM implied volatility remained more stable, going from 71% to 70% (-1% WoW). The 25-delta skew is positive for both assets across all time frames, with ETH showing a steeper and higher skew. This likely reflects traders positioning for a catch-up trade in ETH, which still has not reclaimed all-time highs, unlike SOL and BTC. Short-term volatility skew (ETH-BTC) supports this narrative, but medium- and long-term skews are flat, signalling that any near-term ETH outperformance is expected to fade, as seen in its previous failed breakout attempts over the last two years (see ETHBTC ratio).
On the macro side, early Monday in Asia, President-elect Donald Trump announced plans to impose new trade tariffs on China, Mexico, and Canada. This sparked a sharp rally in the US Dollar Index and triggered a risk-off sentiment, sending equity futures lower.
US GDP (QoQ) Q3 came in at 2.8% in line with forecasts on Wednesday. Meanwhile, the October PCE Price Index, the Fed’s preferred inflation measure, met expectations. Headline PCE rose 2.3% year-over-year, while core PCE climbed 2.8%, staying above the Fed’s 2% target.
With stock markets closed yesterday for Thanksgiving and only open for half a day today, crypto markets and order books are thinner, setting the stage for choppy prices.
Next week will be busy with key macro events, including
- Monday, 2 December 2024: US Manufacturing PMI data
- Tuesday, 3 December 2024: US JOLTs Job Openings
- Wednesday, 4 December 2024: ADP Nonfarm Employment Change, US Services and Non-Manufacturing PMI data, Fed Chair Powell speech
- Friday, 6 December 2024: Nonfarm Payrolls & US Unemployment Rate
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