Bitcoin Gets Out of the Rut

On September 14, bitcoin finally got the move it was looking for. We were able to break the $10k-$10.5k price range while creating a new support level at $10,650.

BTC, Gold, & Stocks

As investors continue to bail on cash we see higher prices on every asset class in the market. The U.S. dollar continues to lose value against other currencies, making it less than ideal to hold it long-term. Many investors are waiting for the Fed’s next meeting on Wednesday to anticipate further damage to the currency.

Bitcoin has reached an all-time-high in correlation with gold. The 60-day correlation rose to a record high above 0.5. Correlations with magnitudes between 0.5 and 0.7 indicate moderate positive correlation. Anything above 0.7 signifies a strong positive correlation. This is not to say that Bitcoin is not in correlation with the stock market. Quite the opposite. Crypto investors remain vigilant for any significant movement in equities.

S2F

The stock-to-flow model is something you might have come across with. It’s an on-chain indicator that measures the amount held in wallets to amount of bitcoin mined. This has served as a good long-term indicator and it’s showing a move towards the up-side is in play.

Bitcoin stock-to-flow model as of Sep. 14. Source: PlanB

There is another model that takes in other commodities into account like gold, silver, diamonds and real estate. This type of model is referred to as a stock-to-flow cross-asset (S2FX) model. The S2FX is calling for an average BTC price of $288,000 before 2024.

$36k Bet

Some investors are taking on a $36k bitcoin priced bet. The Deribit crypto derivatives exchange is seeing an increase of interest for a price of bitcoin passing the all-time-high price of $20k by the end of this year.

BTC options: open interest change

Statistically speaking, a price level that high in a short amount of time is improbable. The odds of bitcoin setting a new lifetime high over $20k by the year’s end are just 5%, while the likelihood of prices crossing $28k is 2%. Furthermore, reaching all-time-highs of $20k is only 9% by the end of Q1 2021.

BTC options: open interest change

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