We did it — BTC soared past the critical USD 100,000 psychological resistance yesterday morning during the Asian session, hitting an all-time high of USD 104,000 on multiple exchanges. This breakout triggered a short squeeze, leading to over USD 100 million in BTC short liquidations within just four hours. The catalyst for the surge was Fed Chair Jerome Powell’s remarks at the DealBook Summit, where he compared bitcoin to gold rather than the US dollar.
This is a monumental moment for the BTC community, and it hitting USD 100,000 feels like confirmation that BTC will inevitably reach USD 1,000,000 in the future.
After a brief celebration, it is now back to business! Following BTC’s push above USD 100,000, Open Interest surged to levels near last week’s USD 99,500 rejection level. Funding rates nearly doubled compared to last week, and Binance borrowing rates spiked to 82% p.a. — a level not yet seen in this bull market, signalling an overleveraged market. While not inherently negative on all aspects, this setup heightens the risk of a leverage flush if prices drop, which indeed happened overnight.
With BTC reaching lows slightly above USD 90,000 on multiple exchanges while dipping below USD 90,000 on OKX due to significant perp liquidations (more than USD 400 million of BTC liquidations). From a liquidity standpoint, Coinbase sustained a premium of over USD 500 (including the USDT premium) versus Binance and other exchanges for over 30 minutes, with BTC holding lows above USD 92,000.
Nevertheless, crypto markets reacted strongly with BTC back above USD 98,000 and ETH trading around USD 3,900.
On the Altcoin front, ETHBTC still looks promising, with ETH showing relative strength and currently trading below 0.04 after a failed breakout to 0.0403. With SOLETH showing weakness on the 4H and daily candles, I prefer positioning in ETH for the short to medium term. A daily close below 0.058 on SOLETH could serve as an initial signal to rotate long-term SOL holdings into ETH.
BTC’s 30-day at-the-money (ATM) implied volatility decreased slightly from around 56% to 55% (-1% WoW), same for ETH’s ATM implied volatility, going from 70% to 69% (-1% WoW). The 25-delta skew is positive for both assets across all time frames, with ETH still showing a steeper and higher skew.
On the macro side, Monday saw the Eurozone’s unemployment rate holding steady at 6.3% in October, while US manufacturing activity showed a slight improvement in November, with PMIs at 49.7 (S&P Global) and 48.4 (ISM), slightly above expectations.
On Tuesday, US JOLTS job openings rose to 7.744 million in October exceeding forecasts of 7.51 million, up from a revised 7.372 million in September.
By Wednesday, the ADP Nonfarm Employment report revealed weaker-than-expected job growth in November, adding 146,000 jobs versus a forecast of 166,000, with October’s figure revised down to 184,000.
This afternoon, all focus will be on Nonfarm Payrolls and Unemployment data, offering key insights into the Federal Reserve’s rate decision next week. Markets are currently pricing a 70% probability of a 25 bps rate cut.
Next week’s key macro events, include:
- Tuesday, 10 December 2024: German CPII
- Wednesday, 11 December 2024: US CPI/Core CPI
- Thursday, 12 December 2024: UK GDP, SNB Interest Rate Decision, ECB Interest Rate Decision, US PPI
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