The Bitcoin (BTC) chart – The Cryptonomist

From decorrelation with the S&P 500 to declining volatility, a close look at Bitcoin’s chart and an analysis of where we are in the bear market.

Bitcoin’s chart in the month of October

October has always been a good month for digital gold (BTC). Indeed, the tenth month of the year has often seen the currency regain altitude.

In the past ten years, as many as 7 have been able to record this correlation, and precisely in conjunction with this weekend, Bitcoin has recovered slightly with average returns of over 18%.

The current month also brings some good to Ethereum according to the track record, even though performance is far poorer than its big sister with average returns of 3%.

In particular, this month Bitcoin is up 0.4% while Ethereum is up 1% so far, despite restrictive monetary policies (Quantitative tightening). 

The same thing can also be observed in the stock market, which since the 1950s finds a noticeable appreciation during the month of October.

The correlation of all these data leads one to think that at this time of the year physiologically the markets will breathe a sigh of relief that will be more or less important depending on the type of market it is in (bear or bull) and the macro situation.

Bitcoin’s pricing, volumes, volatility and signals

Bitcoin in relation to other altcoin trading pairs has risen 50% in the past two years and this is the first time this has happened since 2020.

The currency’s market share fell to lows as the Ethereum Merge approached in favor of Buterin and Co.’s coin in the bullish phase of 2021, at which time ETH had an 80% market share. 

Bitcoin’s 20-day volatility is lower than the Nasdaq and S&P 500 stock indices, and this usually occurs near a bearish market bottom.

The two major cryptocurrencies have dropped 58% and 64% of their value since January, respectively, and fewer and fewer people are deciding to sell; in addition, Bitcoin has decoupled from the stock market showing great resilience to macro news impacting it.

On Sunday, Bitcoin closed just below $20,000 confirming that the range between $18,000 and $22,000 can be considered the currency’s comfort zone and thus hypothetically its bottom.

According to Kaiko, what we are experiencing is the longest time frame since 2018 in which Bitcoin has been less volatile than the Nasdaq. 

The price of Satoshi’s currency has fallen by two-thirds from its all-time high, and drops in volume have been recorded in all markets between the third quarter of last year and 2022.

Platforms such as Coinbase dropped more than 50% others such as Bittrex by 67%, Gemini by 70.3%, and Huobi suffered the largest volume drop or 85.6%.

For its part, on the 11th of this month, Bittrex suffered the largest enforcement action by the US Treasury for violating sanctions programs between 2014 and 2018.

While volumes fell in the rest of the world, they rose in the United Kingdom last month as traders took advantage of the high volatility of the pound snubbed in favor of crypto markets.

Binance and Coinbase the world’s largest exchange platforms saw sharp declines in BTC-GBP volumes, from 80% in June 2021 to 30% today partly due to the poor monetary policy moves by resigning PM Truss and the suspension of transfers from the Single European Euro Payments Area (SEPA) between July 2021 and March 2022.

A look at other news from the crypto world

BTC and ETH have a diminishing correlation going from 97% last month to 76% this month recording the lowest point since November 2021 to date for the currency pair.

The SEC and CFTC investigated Three Arrows Capital again, this time looking at the fund’s compliance with rules, their enforcement, and whether anything was omitted or misled to confuse investors about their balance sheet.

Aptos kicked off a $154 million airdrop to its users as we explained in an extensive article yesterday, Mastercard on the other hand extends a helping hand to banks by offering ready-made cryptocurrency trading for adoption for a hypothetical partnership, and Binance grows in Uniswap becoming the second largest holder of DAO votes.

Bitcoin’s chart set to grow 

Bitcoin’s market price is projected to grow for at least the next ⅘ years, and the trend will be driven not only by the performance of the currency itself but by private keys and hardware subsectors in the payments arena given the growing trend of demand from banks and institutional investors.

Analysts’ prediction for the global BTC transaction market is for a compound annual growth rate (CAGR) of 16.3% from 2022 to 2031, with private keys and hardware driving the industry’s expansion, predicted Allied Market Research in a report released on 24 October.

The market by 2031 will reach $3.7 billion.

“Furthermore, the increased demand for bitcoin among banks and financial institutions and the untapped potential in emerging economies should provide profitable opportunities for the expansion of the bitcoin payments market during the forecast period.”

Three-quarters of the total market portion of Bitcoin payments is made up of private keys and it is expected that the e-commerce market will be able to maintain payment dominance even increasing by nearly 20.2% by 2031 with a greater concentration in use for the Asia-Pacific region.

The global adoption of Bitcoin may be held back not so much by its current pricing but rather by its high costs and lack of awareness. Therefore, sufficient financial education in crypto is important:

“Distributed ledger technology has spread from cryptocurrency to a large number of applications in the financial and government sectors. However, numerous individuals and financial and government industries in developing countries such as India, Africa and Australia are less aware of transactions made using bitcoin payment, which hinders the growth of the bitcoin payments market around the world.”