Bitcoin concluded what has historically been its third-worst week of the year, experiencing a notable 5% drop, closing at $109,643.26. As Week 38 wraps up the third quarter, Bitcoin has shown a modest increase of about 1% for the quarter and managed to remain flat throughout September. Traditionally, this time of year is characterized by weaker performance for the cryptocurrency, and various factors have likely contributed to its underwhelming results.
On Friday, over $17 billion in options expired, with a max pain price—defined as the strike price at which option holders sustain the most losses while options writers gain the most—centered around $110,000. This created a sort of gravitational pull for Bitcoin’s spot price. A critical technical measure to watch is the short-term holder cost basis at $110,775, representing the average acquisition price on-chain for Bitcoins that have changed hands in the last six months. Bitcoin tested this level earlier in August, and during bull markets, it often gravitates towards this benchmark. This year, Bitcoin fell decisively below this mark only once, during the “tariff tantrum” in April when prices plunged to as low as $74,500.
Looking at the broader picture, analysts are keen to determine if Bitcoin is still in a long-term uptrend that features higher highs and higher lows. Caleb Franzen, an analyst, pointed out that Bitcoin recently slipped under its 100-day exponential moving average (EMA), while the 200-day EMA is positioned at $106,186. The last significant low was noted at approximately $107,252 on September 1. For the prevailing trend to hold, Bitcoin needs to maintain its price above this level.
In the context of macroeconomic factors, the U.S. economy showed impressive growth at an annualized rate of 3.8% in the second quarter, surpassing the 3.3% expectations and marking its strongest performance since early 2023. Initial jobless claims dropped by 14,000 to 218,000, reaching the lowest point since mid-July and aligning with market forecasts. Meanwhile, the U.S. core PCE price index, which excludes food and energy costs and is favored by the Federal Reserve as an inflation measure, rose by 0.2% in August.
In financial markets, the yield on 10-year U.S. Treasuries bounced from the 4% support level and is currently trading around 4.2%. The dollar index (DXY) remains around long-term support at approximately 98. Commodities like silver are generating considerable buzz as it approaches an all-time high, mirroring levels last seen in 1980 and 2011. In contrast, U.S. equities are nearing record highs, while Bitcoin remains a notable outlier, trading more than 10% below its peak.
On the corporate front, Bitcoin treasury companies are facing challenges, particularly concerning their multiples to net asset value (mNAV). The leading firm, MicroStrategy (MSTR), has barely maintained a positive return for the year, and at one point, its shares dipped below $300. The ratio between MSTR and the BlackRock iShares Bitcoin Trust (IBIT) has reached its lowest point since October 2024, indicating significant underperformance relative to Bitcoin itself. As of Friday, MSTR’s enterprise mNAV stood at 1.44, factoring in basic shares available alongside liabilities.
Interestingly, despite the downturn, three of MSTR’s four perpetual preferred stocks—STRK, STRC, and STRF—are showing positive lifetime returns as Executive Chairman Michael Saylor continues to explore avenues to acquire more Bitcoin through these financial instruments. However, a growing concern for MSTR is the diminished volatility in Bitcoin. The cryptocurrency’s implied volatility has fallen below 40, marking its lowest level in years, which is counterproductive as higher volatility often attracts speculative interest, creating additional trading opportunities.
Additionally, Metaplanet, the fifth-largest Bitcoin treasury company, holds 25,555 BTC and has around $500 million to deploy from its international offerings. Yet its stock struggles at approximately 517 yen ($3.45), significantly down from its all-time high by more than 70%. Metaplanet’s mNAV has decreased sharply to 1.12 from 8.44 in June, with its market capitalization now at $3.94 billion, compared to a Bitcoin NAV of $2.9 billion and an average BTC acquisition cost of $106,065.
