The Weekly Report is our summary of key indicators and recent events in the crypto world that professional traders are closely monitoring. This report and other relevant information are first shared via the official League of Traders Telegram channel.

Here are our notes for the fourth week of November!

1. Bitcoin Chart/Ethereum Chart

On November 21st, the price of Bitcoin hit $ 37,500, up slightly from last week’s $36,300. If this uptrend is maintained, Bitcoin could break above the 38k resistance this week. If it breaks the short-term resistance of 38k, the next major resistance level will be near 45k. If it fails to break above the 38k resistance, the 34–35k area, which has seen a lot of volume recently, could be the next short-term support.

BTCUSDT Chart (Binance)

Ethereum’s price dropped slightly from last week’s $2048 to $2031 this week, but the short-term trend has rebounded after hitting a low point on November 17th. Ethereum is more volatile than Bitcoin, but with positive news such as BlackRock joining Fidelity in filing for an Ethereum spot ETF, it is more likely to continue its short-term trend than face a major correction.

ETHUSDT Chart (Binance)

Bitcoin’s dominance rose slightly from 52.34% to 52.70% last week. The upward trend in dominance that started late August took a pause this month, but with the approval of a Bitcoin spot ETF in sight, Bitcoin appears to be gaining momentum again. However, with the SEC’s decision on the approval of the spot ETF delayed until January next year, there is still a chance that the approval could be denied or delayed again.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

The US 10-year Treasury rate dropped significantly from 4.640% last week to 4.410% this week, as headlines for October’s Consumer Price Index were released last week, showing that prices were flat month-over-month compared to September. This was lower than previous forecasts, shaking off worries about a prolonged period of high-interest rates in the market and pushing Treasury rates lower.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The U.S. Dollar Index has also fallen sharply along with the U.S. Treasury rate and is now at 103.38. Last week, the US Dollar Index experienced its sharpest weekly decline since July. Unless the FOMC minutes from this week’s meeting have something specific to say about the decline in US Treasuries and the dollar, the US Dollar Index is likely to remain weak for the foreseeable future.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

The Nasdaq 100 rose from 15500 to 16000, driven by risk appetite as U.S. Treasury yields fell and the dollar weakened. The gains were driven by expectations that inflation has peaked alongside a slowing U.S. economy and that the Fed’s tightening policy could pivot to an easing stance sooner rather than later. In terms of individual stocks, Nvidia, Lucid, and Microsoft led the index with significant gains, with the latter rising in the mid 2% range following the news of Open AI head Sam Altman’s firing on expectations that the company could absorb key personnel such as Altman into Microsoft, which still holds a majority stake in Open AI.

US100 (TradingView)

• Gold Futures

Gold futures rose from 1945 to 1988 last week. In the short term, this translates to relative strength in the price of gold due to the weakness of the dollar. In the medium to long term, the price of gold futures could continue to strengthen as countries whose currencies are unstable or whose economies are not performing well due to unrest in international affairs turn to safe-haven assets like gold. This could also be a positive factor for the price of bitcoin, which is often referred to as digital gold.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z score

The MVRV Z-score reached 1.20 this week, up from 1.14 last week, which is typical of an upward cycle and is expected to remain consistently positive until after the halving. However, caution is warranted, as short-term shocks from external factors can cause the MVRV Z-score to drop close to zero.

• Indicator explanation: The MVRV Z-score is a measure that determines whether Bitcoin’s market cap is overvalued or undervalued by dividing the difference between Bitcoin’s market cap and realized cap by the standard deviation. If the MVRV Z-score is below 0, Bitcoin could be considered as undervalued. In the overheated market that reached the All-Time High (ATH) in 2021, scores of 6 or higher were shown.

Bitcoin: MVRV Z-Score (Glassnode)

• aSOPR

The aSOPR was 1.027, up slightly from 1.017 last week. The aSOPR can be judged on a scale of 1, with a reading above 1 indicating a sustained bull market.

• aSOPR is short for Adjusted Outfit Profit Ratio, a value obtained by dividing the price of received bitcoin in the past by the price at the time of transmission. When SOPR is less than 1, it indicates a downtrend, and when it is above 1, it indicates an uptrend. aSOPR is a more accurate value that removes meaningless transactions within the hour for adjustments.

Adjusted SOPR (Glassnode)

• Open Interest

Open interest in Bitcoin perpetual futures rose to $9.3B this week from $9.05B last week. However, as the combined estimated exchange leverage ratio remains low at 0.20, open interest will likely continue to grow without liquidation for some time, rather than being cleared by liquidation.

Outstanding Open Interests by Exchanges (Glassnode)

Combined estimated exchange leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Bitcoin positions on exchanges have increased with an inflow dominance, which means that the price of Bitcoin could move sideways or fall due to short-term arbitrage selling. However, the inflow of Bitcoin to exchanges could also be interpreted as a sign of restored confidence in centralized exchanges, so we could expect to see leveraged trading boosted by this volume.

Bitcoin: Exchange Net Position Change(Glassnode)

• Number of Whale Wallets

The number of 10k+ whale wallets has slightly decreased alongside the rise in Bitcoin prices. When viewed in conjunction with Bitcoin inflows on exchanges, it could be interpreted that some whales are taking short-term profits at this level. However, judging by the lows recorded this summer, this is also a zone where the number of whale wallets is more likely to move upwards than downwards.

Number of Bitcoin wallets holding 10k or more(Glassnode)

5. Last Week’s Major News

• SEC Delays Decision on Grayscale’s ‘Ether Futures’ Approval

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Grayscale’s Ethereum Futures Exchange Traded Fund (ETF), as reported by CoinDesk US on the 15th. The SEC has also delayed its decision on the application by crypto asset manager Hashdex to convert its Bitcoin spot ETF into a physical ETF. Hashdex submitted relevant documents to the SEC in September to convert its Bitcoin Futures ETF into a spot ETF. In the same month, Grayscale also applied for an Ether Futures ETF. Although the deadline for both applications was set for the 17th, the SEC announced an extension of this period. The SEC has not yet revealed how the final decision will be made, expressing ongoing concerns about Bitcoin’s vulnerability in the market and a lack of oversight sharing agreements.

• Chronos Research Reports $25 Million Ethereum Hack

Chronos Research, a Taiwan-based financial technology company, announced unauthorized access of its API keys. Through a series of tweets posted on the 19th, cryptocurrency analyst JackXBT revealed that $25 million worth of Ethereum (ETH) was leaked due to this hack. Chronos explained that a significant portion of the leaked funds were not company capital. Following the hack, Chronos temporarily halted all trading activities. This decision also affected WooX Exchange, where Chronos is a major market participant. WooX announced a temporary suspension of asset transactions, reassessing the safety of customer assets. At the time of publication, spot and derivative trading, and withdrawals have resumed.

• Simultaneous Surge in Bitcoin Hashrate and Mining Difficulty

On the 19th, the Bitcoin hash rate maintained a steady pace at 468 hashes per second, surpassing the 10-minute block interval average. The most recent block was processed in just 7 minutes and 37 seconds. If this block interval trend continues, network difficulty is expected to increase by 3%, marking the seventh consecutive increase since September 19th.

6. Major economic events

• Major economic events last week

Last week was dominated by US consumer prices. The US Consumer Price Index for October came in below what was forecasted, coming in flat at 3.2% YoY and 0% MoM, which was interpreted as data that inflation in the US was getting under control, leading to a decline in US bond yields, a weakening of the dollar index and a rise in risk assets, including US equities. A larger-than-expected increase in U.S. crude oil inventories also added to the tailwinds for asset markets, dampening concerns about rising oil prices, a key driver of inflation.

Major Economic Events for the 4th week of November 2023 (Investing.com)

This week’s major economic events

This week will be characterized by the release of the Federal Open Market Committee’s meeting minutes and changes in US crude oil inventories. Thursday and Friday of this week will be Thanksgiving in the U.S., giving U.S. equity markets a break.

Major Economic Events for the 4th week of November 2023 (Investing.com)

Summary

Positive indicators: US bond rate, US dollar index, MVRV Z-score, aSOPR, futures leverage ratio

Negative indicators: Open interest, exchange flows, and whale wallets

Overall Review: Bitcoin continued its upward trend last week. Macroeconomic indicators, such as the decline in U.S. bond yields, are also positive for the crypto market. However, open interest in Bitcoin perpetual futures has increased, and there are changes in on-chain indicators such as exchange outflows and inflows, and the number of whale wallets, that may raise concerns about a short-term correction. If you already own spot, we predict that holding if you can and buying the dip, if the price corrects in the near term, would be a worthwhile strategy.