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 fifth week of November!

1. Bitcoin Chart/Ethereum Chart

On the 28th, the price of Bitcoin was at $37300, down slightly from last week’s $37500. The price rose to a high of $38400 on November 24th, but the daily close failed to break the $38K mark and turned into a downtrend. The price of Bitcoin is currently showing limited volatility, forming a range with $38K as resistance and $35K as support.

BTCUSDT Chart (Binance)

Ethereum’s price is largely unchanged from last week’s $2031 to this week’s $2049, which is more positive than Bitcoin. Expectations for the approval of an Ethereum spot ETF, as well as the upcoming EIP 4844 upgrade in the first quarter of next year, could give it a boost against Bitcoin.

ETHUSDT Chart (Binance)

Bitcoin’s dominance is almost unchanged at 52.66%, down from 52.70% last week. With the current timeline for Bitcoin and Ethereum spot ETF approvals pushed back to the first quarter of next year, volatility from the spot ETF issue should be limited in the short term. However, we could see more weakness in altcoins as the recent gains for the likes of Solana (SOL) and SEI, which have been leading the altcoin rally, have come to a halt.

Bitcoin dominance chart (source: CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

The US 10-year Treasury rate rose slightly to 4.484% from last week’s 4.410% but remains largely unchanged. Bond yields are stabilizing, with market participants observing that they have effectively peaked. The short- and long-term interest rate inversions persist, with a spread of approximately 0.47%. With 96% of bond professionals predicting that the Fed will keep rates unchanged through the year, attention is focused on Fed Chairman Powell’s upcoming speech this weekend.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The U.S. dollar index is trading weakly at 103.323. As interest rates in the US have peaked and are stabilizing, the US dollar has weakened along with them. If Japan’s zero interest rate policy comes to an end, strengthening the yen, and US interest rates stabilize further downward, we could see additional dollar weakening in the near future.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

The Nasdaq 100 is entering a lull after four weeks of gains. The chart shows that the index is hovering near a consolidation point that it made back in July, and a breakout to the upside could lead to a Santa Claus rally. The key question is whether the Nasdaq 100 can rise above 16000 in this zone.

US100 (TradingView)

• Gold Futures

Gold futures are trading at a six-month high as they move above 2000. This has been driven by the stabilization of US interest rates and the weakness of the dollar, and if expectations of an end to US tightening persist, we should see a positive trend for some time.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-score is at 1.19, down slightly from last week, but still indicative of a bull market. Considering the current MVRV Z-score, even in the event of a correction, the magnitude of the correction is expected to be relatively small.

• 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 can be considered to be 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 is at 1.017, slightly lower than last week’s 1.027, but still above 1, indicating a bull market. With Bitcoin’s price facing resistance at 38k, it remains to be seen if the aSOPR will be able to consistently stay above 1.

• aSOPR is short for Adjusted Spent 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

Bitcoin’s open interest in perpetual futures is $9.06B, down from last week’s $9.3B. The exchange-combined estimated leverage ratio is 0.20, unchanged from last week. Given the decrease in open interest and the maintenance of the leverage ratio, it is unlikely that liquidation will cause sharp fluctuations in price.

Outstanding Open Interests by Exchanges (Glassnode)

Exchanges’ combined estimated leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Exchange Bitcoin positions have shifted from inflow dominance to outflow dominance over the past week, which could be interpreted positively as lower selling pressure. However, because the outflows are small, exchange holdings could be considered neutral at this time.

Bitcoin: Exchange Net Position Change(Glassnode)

• Number of Whale Wallets

As the price of Bitcoin has risen, the number of whale wallets has decreased slightly, which could be interpreted as some whales realizing profit on their short-term investments. At the current price point, the number of whale wallets needs to increase or at the very least remain constant to raise expectations of a higher Bitcoin price.

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

5. Last Week’s Major News

• Binance Exits US Market…CEO Changpeng Zhao Resigns

Binance, the world’s largest cryptocurrency exchange, has agreed to pay a $4.3 billion fine and withdraw from the U.S. market after being criminally charged with violating anti-money laundering laws. Binance’s founder, Changpeng Zhao, will step down as CEO.

• Blast TVL surpasses $500 million

The decentralized finance world is abuzz with the rise of Blast, an Ethereum Layer 2 network initiative that has attracted over $450 million in total value locked (TVL). Led by Blast founder Tieshun Roquerre, Blast is advertising “risk-free” staking rewards, promising high returns on decentralized finance projects like Lido and MakerDao. These claims have sparked controversy within the crypto community, with many experts questioning the true lack of risk in staking and expressing concerns about the security of transactions, especially with the use of anonymous keys.

• GBTC Discount Rate Hits New Low…”Reflecting ETF Approval Expectations”

The discount on Grayscale’s Bitcoin Trust (GBTC) has shrunk significantly since 2021 amid growing optimism regarding the approval of a Bitcoin spot exchange-traded fund (ETF). According to CoinDesk US, the GBTC premium is now at an 8.6% discount from its net asset value (NAV), the smallest discount in two years. GBTC has been trading at a discount since February 2021 and hit an all-time low of nearly 50% in December of last year.

6. Major economic events

• Major economic events last week

Last week, U.S. crude oil inventories rose more than initially forecasted, quieting inflation concerns. However, new jobless claims came in lower than expected, providing the Fed with data that the labor market remains robust. As for US interest rates this year, most experts expect a hold. However, if the U.S. jobs and real economic markets show a bit more weakness, there is some expectation among investors that the Fed could consider cutting rates as early as next year.

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

This week’s major economic events

This week sees the release of the US core consumer price index. If the inflation rate stabilizes, it will be positive for asset markets, including Bitcoin. The other major event is Chairman Powell’s speech at the end of the week. Powell’s speech is expected to give us an idea of what to expect from the Fed’s interest rate policy later this year and early next year.

Major Economic Events for the 5th week of November 2023 (Investing.com)

Summary

Positive indicators: US dollar index, gold futures, MVRV Z-score, aSOPR

Negative indicators: Number of whale wallets

Overall Review: Bitcoin is showing weakness at the current price level, failing to break through resistance. However, when looking at the macro economy, with US interest rates stabilizing, the dollar index falling, and the price of gold futures about to break through a consolidation point, Bitcoin’s price is expected to be positive in the long run. Consider holding on to your current long positions or increasing your crypto allocations in the event of an extended downturn.