Whenever the crypto Market pumps or Dumps everyone asks the question why why Why why why the short answer is almost Always because BTC is pumping or dumping Where BTC goes the rest of crypto Follows this bags the question of what Causes BTC to pump or dump a recent Report from one of the best crypto Research firms has all of the answers Answers that can help you predict the Next big Market move that's why today We're going to summarize this report and Tell you how you can use its findings to Get an edge in the crypto Market if you Hold crypto this is a video you cannot Afford to Miss the report will be summarizing Today is titled the forces moving Bitcoin it was published by a crypto Research firm k33 and we'll leave a link To the report in the description I'll Quickly note that to access the report You need a pro account and coin Bureau Club members get a 50% discount anyhow The report begins with a brief Introduction where the authors explain That the purpose of this report is to Present a framework that determines what Causes BTC to pump or dump notably this Framework accounts for the fact that Some of these factors change and Interact with each other however the Authors's caution that it is Theoretically impossible to predict BTC
Price action with 100% certainty and That there could be other Frameworks That are much more accurate even so the Authors believe that their framework Serves as a good starting point for Figuring out what makes btc's ticker Tick this ties into the second part of The report which seeks to set a Foundation for the author's framework The authors underscore the fact that BTC Is not only scarce but its Supply is Predetermined by bitcoin's protocol Rules this makes it different from other Assets which have less predictable Supply Dynamics in the third part of the Report the author serve up the meat and Potatoes what determines btc's price the Short answer is multiple factors and What's interesting is that the authors Look at these factors through the lens Of momentum specifically how they Increase upward or downward price action They again highlight the fact That these momentum factors can interact With each other and they often take Turns being the primary drivers of btc's Price action the authors group these Momentum factors into three categories Demand factors Supply factors and Structural factors by the way if you're Enjoying the video so far be sure to Smash that like button to help others Find it and enjoy it and subscribe to The channel and ping the notification
Bell so you don't miss the next one one Now when it comes to demand factors the Authors note that btc's in elastic Supply makes the demand side of the Equation the most important within this Equation the authors identify six Factors sentiment news utility macro Cyclicality and Accessibility starting with sentiment The authors further divide this factor Into three camps long-term BTC holders Institute investors and Retail investors The sentiment of long-term BTC holders Can be assessed using onchain analysis For institutions it can be assessed by Analyzing the trading of BTC Futures on Trafi exchanges like the CME and for Retail investors it can be assessed by Looking at stuff like web traffic not Surprisingly long-term BTC holders tend To sell when sentiment is high and buy When sentiment is low also not Surprisingly retail investors tend to be The biggest drivers of these sentiment Moves as they buy when the prices is are High and sell when the prices are low on That note the authors reveal that retail Trading activity on coinbase is still Very low and is at levels similar to the Beginning of the previous crypto ball Market in late 2020 this suggests that retail investors Haven't really arrived yet and that the Current crypto ball Market is about to
Enter its parabolic phase more about When altcoins could pump using the link In the description but back to the three Camps of the sentiment Factor remember That institutional investors are in the Third camp now what's fascinating is That btc's price tends to follow Whatever institutional investors are Doing on trfi exchanges like the CME in Other words they are ahead of the Curve Naturally the authors note that all Traders should therefore pay close Attention to changes in things like open Interest for BTC Futures on the CME as Well as spot Bitcoin ETF inflows and Outflows as they can potentially predict How BDC will perform in the following Hours or days we interrupt this program For an emergency crypto where the Forecast get ready for the Whirlwind of Savings we're seeing a high press sign Up bonus system forming in the North e With some exchanges offering to $660,000 Lush in the South will'll be seeing some Heavy discounts on Hardware wallets so Watch out for those if you're going to Be out and about and then over in Central areas there's a high chance of Trading fee discounts which should be Setting in later on up to 60% off there Amazing for a more comprehensive Forecast visit the coin buau deals page Using the link in the description these Deals are red hot so make sure to take
All necessary Precautions that's all for the forecast Now back to our scheduled program now The next factor in the demand bucket is News the authors recount how BTC hit Local tops around major announcements Such as the launch of the Bitcoin Futures ETF in October 2021 they Acknowledge that the approval of the Spot Bitcoin ETFs seems to be one of the Only exceptions on the flip side BTC has Historically hit local lows during Black Swan events such as the pandemic flash Crash of March 2020 it's safe to say there are no Shortage of black swans out there these Days but so far none of them have bitten BTC Touchwood now next we have utility the Authors admit that BTC doesn't have much Utility these days Beyond being a store Of value from our perspective though it Is possible that BTC could once again be Used for payments this time in International trade some countries are Reportedly using BTC for this already After utility we have macro the authors Accurately point out that btc's Susceptibility to macro factors Ultimately depends on its correlation to Trad fight assets such as stocks given That btc's correlation to stocks has Come down it's likely that BTC is less Affected by macro fact factors black
Swans not withstanding to be clear this Doesn't mean that BTC isn't affected by Macro factors at all just that his price Is affected less this is something the Authors stress and they also stress that Understanding which macro factor is Moving btc's price can be very difficult This is an understatement given all of The geopolitical uncertainty floating Around these days anyways cyclicality is The next subcategory of demand oddly Enough the authors don't provide much Detail here they just know that when the Crypto fomo kicks in BTC tends to Underperform from the rest of the market As everyone sells BTC for alss and mem Coins when the crypto fedd is still Fueling sentiment everyone flocks to BTC For safety causing it to outperform Other Assets Now some would argue that The spot Bitcoin ETFs have affected this Cyclical Trend but let's not go there Now the final factor in the demand Camp Is accessibility which is arguably the Most important factor of them all after All if investors can access BTC its Price won't pump regardless of the Demand this is something the authors Emphasize as well as they know there are Two ways to access BTC natively through Crypto exchanges and the like and by Proxy via ETFs and the like the authors Point out the elephant in the room and That's that there's a lot of pent up
Demand for BTC from institutional Investors who are waiting for the spot Bitcoin ETFs now that these have been Approved these investors have started Buying and because spot Bitcoin ETFs are Backed by physical BTC this has resulted In big BTC buys that move the market now In the second part of the report the Authors unpack the supply side factors Affecting btc's price they start by Saying that BTC has a maximum supply of 21 million and that new BTC are mined Every 10 minutes of course they know the Number of newly mined BTC is cut in half Every four years obviously the Bitcoin Halving is the first supply side Factor What's not so obvious however is the Second Factor and that's lost and Returned BTC the authors use the defunct Mount gox crypto exchange as an Example 142,000 BTC will be returned to Creditors and will apparently be locked For 10 years regarding the haling the Authors note that right now around 900 BTC are mined per day after the haling Expected on the 19th or 20th of April Only 450 50 BTC will be mined per day Just to put things into perspective the Authors know that btc's inflation rate Is currently akin to Golds specifically Around 2% after the haling btc's Inflation rate will be less than 1% the authors hint that continued Demand from the spot Bitcoin ETFs
Combined with the reduction in newly Issued Supply could lead to substantial Gains for BTC they actually predict that BTC will grind higher into the upcoming Hving that's simply because speculators Will likely try to position for this key Crypto Catalyst or rather what comes After it the authors know that the Crypto ball Market tends to occur in the Year after the haling and that Speculators will try to price that in Historically this is translated to 14% Gains preing funly enough the authors Don't seem to say anything to def ative About btc's price immediately after the Haling just that the supply reduction Eventually leads to higher prices our Research suggests that btc's price Immediately after the haling could be Neutral to negative based on the past Haling Cycles this is presumably because this Speculative bubble deflates and BTC Reverts to the mean in any case Regarding lost and return BTC the Authors remind the reader that Bitcoin Creator Satoshi Nakamoto is believed to Hold 1 million BTC which could Theoretically be sold at a moment's Notice they admit that this is very Unlikely but the BTC still has other Much more probable Supply shock risks Besides of the return of BTC from Mount GA the US government still holds around
200,000 BTC it sees from the silkroad Dark knet Marketplace and the like the Authors note that around 111,000 of this BTC is expected to be sold and they Remind the reader that the BTC sales That were planned last year never Happened probably nothing anyways the Authors also touch on the fact that 96,000 BTC from the 2016 bit finex hack Are expected to be returned to the Exchange and that the exchange will use 80% of this BTC to buy back and burn its Leo token so far though only small Fraction of hacked funds have been Returned to bitfinex which is tether's Sister company also probably Nothing anyhow in the third part of the Report the authors tackle the third Family of factors affecting btc's price Which should recall are structural Factors they identify seven portfolio Rebalancing management fees treasury Strategies leverage carry trades Cyclicality and Bitcoin miners Beginning with the portfolio rebalancing The authors explained that as BDC starts To get introduced to institutional Portfolios it will be bought when it Underperforms and sold when it Outperforms per the rebalancing strategy That many institutions use this could Limit btc's volatility but also increase Its correlation to tradire assets some Would say that this is happening already
Regardless the next factor is m Management fees the authors point to Another elephant in the room and that's Grayscales spot Bitcoin ETF for context It has the largest management fees of Any ETF by a wide margin these Management fees are likely contributing To the outflows from its ETF the thing Is that this isn't unique to grayscale Spot Bitcoin ETF at least not in the way That you think you see to pay these Management fees the asset managers Periodically sell some of the ETF shares Which in Practical terms means selling Small amounts of BTC for reference the Authors use grayscale's gbtc trust which Was selling 32 BTC per day as part of Its management fees thankfully the fact That everyone is switching to using Lowcost ETFs means that the amount of BTC being sold as management fees each Day will decline to around 6.5 BTC per Day in total when it comes to cyc it Meanwhile in this case the authors focus On taxation they know that after a big Year investors may have large capital Gain bills that they need to pay off and Imply that this can result in sell Pressure in the short term come to think Of it it's possible this is why crypto Has been selling off lately whatever the Case the next factor is treasury Strategies the authors rightfully point Out that tether has been one of the
Biggest contribut to this factor and it Committed to purchasing BTC using 15% of Its net profits last May since that time Tether has bought tens of thousands of BTC creating a sort of structural Support for its price the authors note That tether's BTC buys also make it a Counter cycal Force because the more the Interest rates rise the more BTC that Tether can buy for those unfamiliar BTC Typically declines when interest rates Rise the catch is that this assumes that Usdt Supply doesn't shrink and that it Likely would if Rising rates would bring Down the rest of the market most usdt Demand comes from Trading speaking of Trading Leverage is another crucial Structural Factor affecting btc's price The authors reveal that retail investors Are the main parties using leverage to Go long or short whereas more Experienced parti ipants like market Makers often take the other side of the Trade they also repeat something that Regular coin Bureau viewers should know And that's the liquidations of Leverage Longs cause BTC to fall lower than Expected whereas short squeezes cause BTC to Rally higher than expected it's Important to note that leverage plays a Role primarily in short-term moves now In terms of carry trades the authors Explain that this involves experence Eren Market participants taking
Advantage of the discrepancies between Funding rates for different trading Instruments in plain English they will Buy or sell BTC along with longing or Short in the current direction of the Market when there's a discrepancy Between spot and Futures Prices finally we have Bitcoin miners Who often have to sell most of their BTC To fund their operations the only two Exceptions are when btc's price is Rising a lot like it is now and when Interest rates are close to zero in the Case of the former miners don't have to Sell as much BTC as in the case of the Latter as they can take on debt instead Of selling BTC the caveat is that miners May be forced into selling more BTC After the haling if its price is lower Something the authors stop short of Saying history has also shown that when Miners take on lots of debt they run the Risk of being forced to sell BTC to pay Back these debts in the future Particularly when interest rates are Rising now in the fourth and final part Of the report the authors provide a few Examples of how you can use their Framework to trade BTC they provide this Handy infographic which shows you how All of the factors in the framework have Affected btc's price over the last four Years by their estimation they then Provide a breakdown of how these factors
Affected btc's price each quarter in 2020 2021 2022 2023 and 2024 so far for The purpose of this video we'll stick to The 2024 analysis as it's the most Relevant so far only one quarter has Passed and the only negative factor Seems to be leverage as you might have Guessed the authors note that retail Investors are to blame and that a good Chunk of The Upside and downside Volatility that we've seen since the Start of the year is because of their Reckless leverag trades fortunately all Of the other factors appear to be Positive sa for macro which is not noted As a negative for some reason what's Even more fortunate is that the authors Forecast that most of the factors in Their framework will be positive in the Remaining quarters the only exceptions Are leverage which the author Au know as Being an everpresent short-term hurdle And also uncertainty around macro Factors which I just noted unfortunately The positive factors may not be as Positive for altcoins that's because the Market structure in the altcoin market Has Changed For example us and UK users Can no longer access the offshore Exchanges where the most promising Altcoins are traded and users in the EU Will experience stable coin restrictions Starting in July this brings me to the Big question and that's how you can use
The findings of this report to get an Edge in the crypto Market the answer is To be aware of each factor and how it's Affecting btc's price and in turn being Aware of how btc's price tends to affect The rest of the crypto Market to recap There are three categories of factors Demand factors Supply factors and Structural factors the demand factors Are sentiment news utility macro Cyclicality and accessibility the supply Factors are in the haling and loss and Found coins structural factors are Portfolio rebalancing management fees Treasury strategies leverage carry Trades cyclicality and miners as the Authors noted throughout this report Btc's short-term price action is the Most affected by factors where retail Investors play a big role this means Mainly sentiment news and leverage the Other factors seem to pain more to btc's Longer term price action and to Institutional investors there is one Important exception though and that's Macro if there's some big macro factor That Spooks institutional investors this Can likewise have an immediate effect on Btc's price action the recent spike in Oil prices is the perfect example it Caused crypto and stocks to slump with Crypto being dragged lower because of The retail sentiment and leverage Logically then if you're looking to get
An edge in the crypto Market you need to Focus on retail sentiment think about How certain headlines are likely to Affect retail sentiment and how prices Could be impacted by leverage in the Case of altcoins you need to factor in Accessibility for the reasons that I Mentioned earlier Assessing retail sentiment can be done Using various sentiment indicators Though the best one of all probably is What's being said on crypto Twitter the Same thing is true for assessing how Retail investors are reacting to certain Headlines as for the leverage this can Be Tried by looking at liquidation heat Maps these show you roughly where lots Of Longs could be liquidated and where Shorts could be squeezed note that we'll Leave a link to all of these resources In the Description now assessing accessibility For altcoins is straightforward it looks Like during this cycle most of the Altcoin speculation will take place on More regulated exchanges such as Coinbase that said there's also been Lots of retail activity on dexes and It's possible that regulation of sexes Will result in more Dex usage so don't Forget about how much macro factors Could impact the crypto Market keeping Track of these is admittedly more Difficult as it requires quite a bit of
Expertise one shortcut you can use is to Listen to podcasts featuring macro Experts just make sure you're getting a Wide range of opinions lastly factoring The extra volatility that altcoins Experience relative to BTC as a rule of Themb altcoins are between 50 and 200% More volatile than BTC that means if BTC Pumps most altcoins will eventually go Up by 50% to 2x more and the same is True if it dumps altcoins tend to Perform the best when BTC is trading Sideways which we haven't really seen Yet by keeping track of sentiment Current and potential future headlines Leverage accessibility and macro you Should be able to get an edge in the Crypto Market that most crypto investors And Traders don't have now this doesn't Necessarily mean that you'll become a Millionaire but with enough practice you Might learn enough to lose less Money and that's all for today's video If you learn something new Smash that Like button to let us know if you want To keep learning subscribe to the Channel and ping that notification Bell If you want to help others learn about What moves btc's price be sure to share This video with them and as always thank You so much for watching and I'll see You in the next one until then crypto Friends this is Jessica over and Out
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