Price action ahead of the inauguration is ‘rigged for unpredictability:’ K33
K33 analysts no longer think that Donald Trump’s inauguration is a sell the news event
mr_tigga/Shutterstock modified by Blockworks
This is a segment from the Empire newsletter. To read full editions, subscribe.
Yesterday I touched on the markets, but today I want to take a deeper dive ahead of the inauguration.
Good news is that there’s some positive data supporting the thesis that bitcoin could be in for positive momentum after Jan. 20.
K33 analysts noted that trading volumes are up 51% this past week, with average daily volumes coming in at $4.3 billion.
“Activity levels were exceptionally high amidst [Monday’s] massive flush and recovery, with spot market volumes reaching $6.5 billion, the highest daily spot volume since Dec. 20. The high volume and sharp recovery suggest many willing buyers amidst BTC’s push below $90,000, a promising observation for the road ahead,” they said.
Now I’m going to offer up the next bit of data without much explanation because I’m not sure we can really explain it outside of theorizing. K33 noted that Jan. 13 was the most volatile day since early December, where the gap between daily returns and intraday volatility was the “highest ever recorded in BTC.”
The easiest explanation is potential profit taking, perhaps to prepare for tax season.
This leads me to this interesting nugget: “prices saw another peculiar pattern over the last week, with 14 consistent green hourly candles in a row for the first time in BTC history, making the past week unique through several lenses.”
From K33’s market report
All of this could mean that Jan. 20 isn’t a sell-the-news event after all, which was a previous possibility.
Back in early December, K33 analyst Vetle Lunde thought we could see bitcoin peak on Jan. 17, ahead of the inauguration, which would set it up for selling pressure as President-elect Donald Trump once again takes the oath of office.
But, to no one’s surprise, bitcoin marches to the beat of its own drum and a lot of what I’ve written and talked about for the past month no longer matters. Don’t worry, I won’t take it personally.
The current setup, K33 noted, is “rigged for unpredictability” which means we all might be in for a bumpy ride over the next few days.
“The overall sensitivity to interest rates over the past month suggests increased importance of Wednesday’s CPI print. Additionally, notable Trump momentum may still form in the days leading into the inauguration. At current levels, we’ve rescinded our plan to sell the inauguration. However, given the plan’s price-dependent nature, a tactical de-risking could regain appeal if prices push meaningfully higher running into the inauguration,” analysts wrote.
We’re not out of the woods yet, and we should all be wary. But, hey, at least it doesn’t seem like we’re peaking yet…right?
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
