Monthly Crypto Alpha Report – October 2023

October

October is here! And it’s a month that historically plays out quite well for those investing in crypto.

But what about this year? Will it be just like the past or is this time different?

Let’s dive into the October Crypto Alpha Report and find out.


Monthly Crypto Alpha Report - October 2023 - - 2023

In the past rather stale month, it has been worth noting how stable BTC has been in the wake of a hawkish Fed and a strong dollar, both of which are not great for risk assets. 

Here’s the BTC price on the weekly chart. At the time of writing, it has crossed the 50-week Exponential Moving Average to the upside. 

A graph of stock market

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Below is the chart of the dollar index (DXY). It has been on a tear in recent months and breaking above the 50-week moving average.

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So, the dollar is strong and BTC is… kind of strong. That’s a slightly out-of-whack state of affairs, as the BTC/DXY pair is most of the time inversely correlated.

And if you thought this is the only mixed message the market gives us, you’re in for a surprise. The economy is like a plane in flight that is almost stalling. Different metrics are flashing mixed signals, confusing the pilots. 

It is a consequence of the whiplash that was given to markets after the covid shock and the subsequent extreme money printing and then extreme monetary tightening.

Now, everyone and their favorite asset class is trying to figure out: are we entering a rather severe recession or will the economy have a soft landing? And so what we have witnessed:

  • Stocks have been falling, signaling a recession
  • Oil prices are up, not necessarily a sign of a looming recession
  • Interest rates are up as if inflation is rising
  • House prices are slightly up, even though interest rates are high
  • Gold is down a lot, not keeping up with inflation
  • BTC is slightly up, acting out of step from stocks and gold

No macro analyst will tell you he or she can make total sense of this. In these unpredictable macro environments, having a diversified portfolio of cash, stocks, real estate, crypto, and precious metals makes a lot of sense.

Supply Held by Short-Term Holders at Record Low

For BTC at least, we can make more sense of the current state of affairs by looking at on-chain data. To put it briefly: while there is not a lot of new money entering the market, no one is selling either.

As you can see from the below Glassnode graph, a record-low amount of BTC in the hands of Short-Term Holders. Only roughly 2.4 million coins are in the hands of short-term holders: around 12% of the total supply.

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View this situation as a forest getting dryer and dryer in the summer sun. When new supply enters the market, this acts as fuel to the fire of the next bull market.

Talking about new supply. The SEC came out with the news that they would delay their verdicts on the ARKInvest and GlobalXETF filings. The Bitcoin spot ETF isn’t going to come in the coming few weeks and probably months. But it will eventually. Blackrock won’t be denied.

The current ranging/accumulation period is typically full of boredom and a bit of sadness. Volumes are down. This is the period where you can accumulate. I know I have. Things will turn around.

While the Fed’s Longer-for-higher mantra signals that they want to keep interest rates high for a long time to come, and with the Bitcoin halving more than 6 months away, expect prices to range. 


Monthly Crypto Alpha Report - October 2023 - - 2023
Monthly Crypto Alpha Report - October 2023 - - 2023

Monthly Crypto Alpha Report - October 2023 - - 2023
Monthly Crypto Alpha Report - October 2023 - - 2023

Monthly Crypto Alpha Report - October 2023 - - 2023
Monthly Crypto Alpha Report - October 2023 - - 2023

Monthly Crypto Alpha Report - October 2023 - - 2023
Monthly Crypto Alpha Report - October 2023 - - 2023

Monthly Crypto Alpha Report - October 2023 - - 2023

Price action is lackluster but the builders are frenetic.

As mentioned, this month saw things like Omni which uses Ethereum’s Eigenlayer. And the upcoming Atticc NFT mint, which is an ERC-6551 token.

These were mostly theoretical concepts mere months ago and already are put into practice.

It’s truly been a summer of builders and there are no signs of slowing down.

Price action will follow… at some point.

If you’re here reading this, you’ll be ahead of the pack to benefit.


Monthly Crypto Alpha Report - October 2023 - - 2023

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Monthly Crypto Alpha Report - October 2023 - - 2023

TCL Publishing ltd (director Lark Davis, owner of Wealth Mastery) is not providing you individually tailored investment advice. Nor is TCL Publishing registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. TCL Publishing is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.

You can find a full disclosure of all my crypto & venture investments here.

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