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Daily Bitcoin and Crypto Analysis

Daily Macro And Crypto Markets Update: Crypto Markets Pull Back Ahead Of Massive Options Expiry

October 28, 2021

Justin d'Anethan

Markets seem to be pulling back somewhat. We see it in equities, with the S&P falling more than half a percent, and other major indexes.

The move also created an interesting buying pressure in bonds which rose on the session, pushing yields down. Gold is also doing ok, currently hovering around $1,800.

Presumably, this all came due to negative expectations on this quarter’s GDP growth and growing concerns about supply chains globally (fewer workers, slowed transportations system, and, of course, inflation for the end customer).

In the crypto space, while we’re still at a great level, relatively speaking, you’ll feel much more bearishness after a pull-back yesterday. BTC fell almost 3%, from a bit above 60K to now just above 58K. Naturally, you don’t need to be a chartist to understand that we wanted to stay above the 60K mark. 

It’s worth noting that there’s a massive options expiry due to come on Friday, with about $3 billion notional and a max pain price at $55,000. Similarly, a $1.1billion notional ETH options expiry is due on the same day, with a max pain point at $3,600.

On the session, BTC fell, but the BTC dominance grew, almost mirroring the previous session. So alts underperformed yesterday. ETH fell almost 5%, from $4,100 to no $3,900.

Amongst the worst performers, DYDX is down 15%, VET and XTZ fell 10-13%, ADA and LINK also are down 10%. Basically, if you’re holding alts and looking at your account balance in BTC, you’ll be down. 

Ultimately, I think the move is primarily due to the natural ebb and flow of markets and the fact that short-term investors who bought throughout this leg up have realized profits as we hit and stayed around the all-time high. Once that’s cleared, we can probably have another run at higher levels.

Long-term, though, the fundamentals mentioned yesterday still hold and should still be supportive. We even saw El Salvador purchase more bitcoins, about 420 of them ($24 mil).

On the bearish side, the SEC has denied Valkyrie’s proposal for a second -this time leveraged- Bitcoin ETF.

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