October 11 Morning Brief | Buyers absorb government BTC transfers; ETFs see $253M in inflows; BTC looks for support above $82,000
【Today in a sentence】
The government is moving coins, ETFs are seeing inflows, and whales are absorbing the supply. $82,000 is today’s test; $81,500 is the line in the sand.
Key variables today:
① The U.S. government transferred about 17,700 BTC to Coinbase Prime this week; K33 believes it was most likely a custody transfer rather than a sale
② $BTC
BTC spot ETFs saw $253 million in net inflows in a single day—the second day of net inflows this week, led by Fidelity
③ BTC is trading around $82,600, up 0.86% in 24 hours after bouncing from an intraday low of $80,427
What did I tell you yesterday?
In yesterday’s morning briefing, I said the downside looked slightly more likely, with 80,500 as the floor.
The result: 80,427—another break, by less than $100. Then it bounced back to 82,800.
I got the direction right, but the floor was a little lower than expected. One detail caught my attention: after falling to 80,427 this time, the rebound was faster than the last one. The previous time it fell to 80,800, it took a long time to recover. This time, it touched 80,427 and bounced straight back by $2,000.
Being right about direction doesn’t guarantee a profit, and being wrong doesn’t guarantee a loss. The market rewards or punishes your actions, not your judgment.
What about you? How many of you bought when it hit 80,427? Tell me in the comments.
Why do I think the downside is slightly more likely?
First, the government is transferring coins. K33 says they aren’t being sold, but the sword is still hanging overhead.
The U.S. government transferred about 17,700 BTC to Coinbase Prime this week, including a 12,267 BTC transfer linked to the Bitfinex hack. Its labeled holdings fell from 324,527 BTC to 306,795 BTC. Including unlabeled wallets, about 21,500 BTC entered Coinbase Prime.
K33’s assessment is that most of the transfers may not be sales, but custody movements. Coinbase Prime has served as custodian for the U.S. Marshals Service since 2024, while Bitfinex-related coins are still tied up in the claims process. The Justice Department wants to return them in BTC.
But there’s something else to consider: whether or not they intend to sell, 17,700 coins have entered exchange custody accounts. Whether they sell is up to them, but the fact that they “could sell at any time” is a sword hanging overhead.
Second, ETFs are seeing inflows again—but don’t celebrate just yet.
On October 11, spot BTC ETFs saw net inflows of $253.54 million, the second day of net inflows this week. Fidelity led with $117 million in net inflows. Ark 21Shares saw $97.6 million in inflows, and Bitwise added $38.8 million. BlackRock’s IBIT had zero inflows and zero outflows.
In plain English: Fidelity is buying; BlackRock is watching. Fidelity is carrying most of the load on its own, while IBIT sits on the sidelines. This isn’t “institutions are back across the board”—it’s “one firm is testing the waters.”
Third, Treasury yields are at 5.24%, and Musalem says more hikes may be needed over the next 6–9 months.
The 10-year Treasury yield closed around 5.24%, and the 30-year around 5.60%. St. Louis Fed President Musalem stated clearly that the Fed will likely need to raise rates further over the next 6 to 9 months. CME data shows an 80% probability of no change in October and an 87% probability of a December hike.
In plain English: A rate pause in October is the consensus, but the December blade is already at our throats.
Section 1: Macro news
1. Federal Reserve: Odds of a December rate hike at 87%; next week’s CPI is the showdown
U.S. September CPI is due next Wednesday. The market expects headline CPI to rise 3.7% year over year and core CPI to rise 2.5%. If CPI comes in significantly hotter than expected, markets may reassess the need for the Fed to tighten policy, potentially pushing Treasury yields and the dollar higher.
JPMorgan, Goldman Sachs, and Citi kick off Q3 earnings season next Tuesday. Earnings for S&P 500 companies are expected to grow more than 30% year over year in the third quarter.
In plain English: Two things next week—CPI and bank earnings. CPI will determine the direction of interest rates; earnings will determine risk appetite. Both are coming next week, and we’ll get a clearer picture then.
Geopolitical event tree:
① U.S.-Iran talks make a breakthrough (30% probability) → Oil falls to $95–98, benefiting BTC
② Talks remain deadlocked and Trump sticks to “no strike before the midterms” (50% probability) → BTC trades between 80,500 and 84,500
③ Military escalation (20% probability) → Oil rises above $108, BTC falls toward 78,000
Trump has made it clear: He won’t attack Iran before the November 3 midterm elections. But this “safe window” lasts only three weeks.
2. Traditional markets: Brent at $100.20; Treasury yields pull back from a 24-year high
Brent crude settled at $100.20 per barrel, and WTI at $88.28. The 10-year Treasury yield fell from an intraday 24-year high of 5.365% to around 5.24%. The 30-year Treasury auction cleared at a yield of 5.618%.
In plain English: The bond market got a temporary breather, but 5.24% is still the highest level in 24 years. This pullback won’t save BTC.
Cross-asset correlation: BTC’s 120-day rolling correlation with gold is 0.52, a six-year high. But today gold and Treasuries are moving together while BTC is bouncing. Correlation is worthless in the face of macro risk.
Fund flows
ETFs: Net inflows totaled $253.54 million on October 11, the second day of net inflows this week. Fidelity led with $117 million, followed by Ark 21Shares at $97.6 million and Bitwise at $38.8 million. BlackRock’s IBIT had no inflows. Ethereum ETFs have seen cumulative outflows of $634.8 million so far in October and are still bleeding.
Ecoinometrics warns that ETF net inflows have remained positive over the past 30 days, at around 30,000 to 40,000 BTC, but the pace of buying has slowed. “It would be best if this support doesn’t have to last too long.”
Binance futures activity: $66.288 million liquidated across the market in 24 hours—$41.1237 million in shorts and $25.1643 million in longs. Shorts took heavier losses; some traders chased the move down at 80,427 and got wiped out by the rebound.
Microstructure snapshot: On Coinbase spot BTC, a buy order of about 64.37 BTC—roughly $5.31 million—notched in at $82,581, about 0.40% below the midpoint. Near-term bids on the exchange total about $23.73 million, versus roughly $21.52 million in asks—a net bid imbalance of about $2.2 million.
In plain English: Someone has placed a $5.31 million bid on Coinbase at 82,581. Someone is willing to buy at this level.
Fund flows: Within crypto—BTC is seeing inflows while ETH is seeing outflows. Across assets—Treasury yields at 5.24% are drawing capital away from risk assets.
Institutional and fund flows
Strategy is still buying. It added 334 BTC last week, bringing its total holdings to 848,000 BTC at an average cost of $75,441. Its current holdings are worth about $73 billion.
Robinhood is buying too. It added $25 million worth of Bitcoin to its balance sheet. A senior vice president said the move is intended to demonstrate the company’s commitment to crypto.
In plain English: Companies are buying. Strategy bought 33 coins, and Robinhood bought $25 million worth. The amounts aren’t huge, but the direction is clear.
But K33’s assessment is worth noting: Bitfinex has committed to using at least 80% of net recovered funds to buy back LEO. Once it receives the coins, that could mean selling up to about 85,000 BTC over 18 months—roughly 150 BTC a day.
In plain English: The government’s coin transfers may not be sales, but once Bitfinex claims are distributed, LEO buybacks could bring sustained spot selling pressure. At 150 coins a day, that’s 55,000 coins sold in a year. This isn’t a one-off dump; it’s a slow bleed.
On-chain pulse
On-chain data tells a clear story.
First, net outflows from exchanges hit a seven-month high. Santiment data shows that 24,073 BTC left exchanges on a net basis on October 6, the largest single-day outflow since March 1.
Second, Glassnode confirms that the trend of whales making net deposits to exchanges has ended. It lasted for more than three months from the summer and ended in late August. Since then, flows have remained negative.
Third, whales are accumulating while retail investors are selling. Addresses holding 10–10,000 BTC—the “whales and sharks”—have accumulated a total of 86,702 BTC over the past three weeks.
In plain English: Coins are leaving exchanges, whales are accumulating, and retail investors are selling. Prices are falling, but coins are moving from weak hands to strong hands.
I trust on-chain data because price is the effect, while holdings are the cause. But it takes time for holdings to change hands; in the short term, derivatives drive prices.
Top trader behavior
Who’s sitting across from you?
Hyperliquid whale long/short ratio is around 0.87, with shorts accounting for about 53.61%. The big players are short.
But there’s one exception—a whale address, 0x5b5d..60, is fully short ETH with 5x leverage at $2,322.63 and is currently sitting on an unrealized loss of $19.3045 million.
In plain English: A whale shorted ETH at 2,322. ETH is now near 2,512, and they’re sitting on a loss of nearly $20 million—and still holding.
What makes you smarter than those 100 accounts?
Market maker behavior and liquidity risk
Wintermute is reducing its position, not adding to it.
Wintermute previously held about $102 million in perpetual short positions on Hyperliquid, then reduced its short exposure from $102.1 million to $55.54 million. Its unrealized profit rose from $928,000 to $2.28 million, and its cumulative profit reached $179.89 million.
In plain English: Market makers are taking profits, not adding to their positions. They’ve made enough, so they’re heading out. They’re not greedy.
But Bitfinex’s LEO buyback is a slow, steady source of selling pressure. Selling 150 coins a day for 18 months. Market makers are heading out, the government is transferring coins, Bitfinex is selling, and whales are buying—you’re in the middle.
Set your stop too tight and the wick at 80,427 takes you out. Set it too wide and Treasury yields at 5.24% grind you down. Your call.
Trending topics
① OpenAI math breakthrough reignites concerns about crypto signature security
On October 6, OpenAI announced 377 mathematical manuscripts produced by an advanced internal AI model, reportedly solving several fundamental problems in just three hours of compute. The crypto industry is beginning to worry about the security of elliptic-curve cryptography—the basis of Bitcoin’s signature security.
K33’s view: There isn’t enough evidence to establish that elliptic-curve cryptography has been weakened. But the narrative is already gaining traction.
In plain English: AI is solving math problems faster than the industry expected. Bitcoin’s security is built on elliptic-curve cryptography—if AI can cut the time to crack it from “hundreds of years” to “a few years,” the whole industry will have to rewrite its security assumptions. In the short term, it’s a sentiment shock; in the medium term, it’s a narrative bombshell.
② FinCEN withdraws two proposed crypto rules
FinCEN withdrew two old proposed crypto rules. One, proposed in 2023, would have labeled international crypto mixing as a “primary money laundering concern.” The other, proposed in 2020, would have required identity checks for transactions involving self-hosted wallets. FinCEN said the definition of mixing was too broad and could discourage legitimate privacy use.
In plain English: Regulators are easing restrictions on privacy and self-custody. This isn’t good news for prices, but it is good news for the industry’s direction.
Technical analysis
BTC: RSI (14) is around 51, neutral. The daily ADX reading is 37.9, with the trend still tilted bullish, but on the 4-hour chart, price remains below the 50-period moving average, so the short-term trend has not reversed. The market is in a rebound and recovery phase after a sharp drop, bouncing up from the lower Bollinger Band at 80,781. Strong resistance above sits at the Bollinger midline at 83,250.
Key levels (save this):
First hurdle above: 83,250–83,500 (the Bollinger midline and the resistance level identified by FxPro; reclaiming it would ease downside pressure)
First support below: 81,500–82,000 (a recent support zone; Coinbase has a $5.31 million bid at 82,581)
If 81,500 breaks, 80,000 is both a psychological level and the market’s target level, with a 67% probability.
Multi-timeframe alignment: Bullish on the weekly. Bullish on the daily (ADX 37.9). The 4-hour chart is turning bearish from a range. The 1-hour chart is ranging. Alignment score: 2.5/4.
ETH: Trading near 2,512, up 1.50%, outperforming BTC. Resistance above at 2,550–2,600; support below at 2,400–2,450.
SOL: Trading near 109.95, up 1.72%. Resistance above at 115–118; support below at 105–108.
XRP: Trading at 1.4061, up 1.68%.
Gold: Flat.
Oil: Brent at $100.20, WTI at $88.28; the U.S.-Iran stalemate continues.
Today’s outlook
Core view: I think the downside is slightly more likely. The government transferred 17,700 coins to Coinbase Prime. ETFs are seeing inflows again, but only Fidelity is buying. Treasury yields at 5.24% are weighing on the market. But someone has placed a $5.31 million bid on Coinbase, and on-chain data shows accumulation. 82,000 is today’s test.
Three scenarios:
Scenario 1 (most likely, 45%): BTC ranges between 81,500 and 83,500. ETF inflows limit the downside, but Treasuries cap the upside. Direction hinges on next week’s CPI.
Scenario 2 (30% probability): Treasury yields continue climbing and the government keeps transferring coins. BTC breaks below 81,500, with 80,000–80,500 in sight.
Scenario 3 (25% probability): A breakthrough in U.S.-Iran talks sends oil prices lower, and BTC rebounds to 83,500–84,500.
Trading plan
My plan: Stay flat. Don’t buy the dip around 82,000, and don’t chase a short if it breaks. Wait for next week’s CPI.
Trade decision tree:
If BTC retests 81,500–82,000 on high volume and holds → Try a small long, stop at 80,800, target 83,500–84,000
If BTC breaks below 81,500 on high volume → Try a small short, stop at 82,500, target 80,000–79,500
If BTC rebounds to 83,250–83,500 on low volume and fails to break higher → Try a small short, stop at 84,000, target 82,000–81,500
If price ranges between 81,500 and 83,500 → Do nothing
Estimated risk exposure: BTC’s daily 95% confidence interval is about ±$2,800. Currently flat, with no risk exposure.
A note on the fragility of this view: My assessment rests on three assumptions—① government coin transfers won’t turn into actual selling; ② ETF inflows won’t suddenly reverse; ③ Treasury yields won’t fall sharply. The most fragile assumption is government behavior. K33 believes most transfers may be custody movements rather than sales. If that’s confirmed, short-term selling pressure disappears and 82,000 could be reclaimed. If all three assumptions are overturned, the next key level is 85,000.
One final observation.
Today’s most surreal moment: The government is transferring coins to Coinbase Prime, Coinbase has a $5.31 million bid at 82,581, and Fidelity is buying ETFs.
One is transferring, one is catching, and one is buying. Which side are you on?
At times like this, I take a look at the Fear & Greed Index. It’s at 56: neutral.
It’s not that you shouldn’t be optimistic. It’s a reminder to myself: with Treasuries at 5.24%, the government is transferring coins, ETFs are testing the waters, and whales are buying the dip. Don’t rush to pick a side before the direction becomes clear.
Did you trade today? Make money or lose it? Tell me in the comments—I want to see how many of you, like me, sat out when BTC hit 80,427.