As of November 15, 2023, 1 btc was worth $36,800 (CoinMarketCap #CMC257). With 45 days remaining until the year end, it needs to go up by 171.7% to breach $100,000. Previous history shows the maximum monthly increase of Bitcoin was 155.6% (in November 2013), but the current market scenario is quite different from the cyclic position. As far as the halving cycle is concerned, the fourth halving of the block reward must take place in April 2024 (block height 840,000). The average increase in 365 days after the first three halvings is 418% (+8,069% in 2012, +284% in 2016, +559% in 2020), but the halving effect usually manifests itself after a lag of 6 to 12 months. The probability of crossing $100,000 by 2023 is below 15% (estimated by the ARK Invest model).
Regulatory approval is one of the key variables. BlackRock Bitcoin Spot ETF approval in 2023 (with 38% probability, Bloomberg #BLMF2023Q4) would result in an inflow of 24 billion US dollars of institutional capital, taking 1 btc to usd up short-term by 50-70%. However, the bold action of SEC Chair Gensler (suing Coinbase and Binance in 2023) has raised the odds of approval to be moved to 2024 to 62%. On-chain metrics-wise, the whale address with over 1,000 BTC (constituting 11.3% of circulating volume) contributed 42,000 BTC (approximately 1.55 billion US dollars) in the price band of 30,000 to 35,000 US dollars. However, the 100,000 US dollar target requires a further market capitalization of about 1.8 trillion US dollars (existing market capitalization 720 billion US dollars). It equates to 15% of the value of the gold market (12 trillion US dollars).
Macro pressure is enormous. The Federal Reserve has raised interest rates 500 basis points total in 2023. The US dollar index (DXY) remains at 106.5. The 10-year US Treasury bond yield is at 4.8%, an all-time 16-year high. The 30-day correlation coefficient between Bitcoin and the Nasdaq 100 Index is 0.81 (the historical median is 0.35), constraining its independent upward space. The sentiment in the derivatives market is conservative. The CME Bitcoin futures outstanding contract volume is $16 billion (all-time high), but the perpetual contract funding rate is only 0.007% (neutral). The probability of the options market making a bet that exercising $100,000 in late 2023 will occur is less than 3% (Deribit data).
The technical indicators disagree. Bitcoin RSI (14-day) is 61 (neutral to positive), and MVRV ratio is 1.35, which is below its bull market average of 2.5. However, the active chain addresses (7-day MA) are at 980,000, down 39% from the 2021 all-time high. Miners’ action is bullish. The network’s total hashrate has moved over 520 EH/s. The miners’ average cost per coin is $18,900, and the shutdown price is $17,500. Their holdings, though, are 1.84 million BTC (representing 9.8%). They would have to sell an average of 3,200 coins a day (presently daily inflow into the exchange stands at 1,800 coins).
Demand for geopolitical hedging is low. During the October 2023 Israeli-Palestinian war, Bitcoin gained 12% in one day (gold 9.3%), although the geopolitical risk premium contributed only about 15% of the gain over a year. The Stockto-flow model of the historical cycle model forecasts the price at the end of 2023 to be $55,000 (with a margin of error of ±35%). Only if a black swan event (like the US dollar index dropping below 90 or global central bank collective interest rate reduction) is achieved can the $100,000 barrier be breached. The present probability model predicts that there is less than an 8% probability (Glassnode #GN2023).