In this episode, we will look at the short term historical bitcoin movements and analyze on what to expect from the BTC price in the coming week. Etherium is also following its big brother and also located in the accumulation zone.
Hello, guys. This is Wunderbit Trading and today we’re going to carry on with our weekly Bitcoin and Ethereum price analysis, but obviously, this episode is recorded in my flat because all our offices are currently working remotely.
So let’s go straight into the charts. As usual in front of you can see four different charts, they’re all related to Bitcoin. The one top left is the BTC futures, the one on the top right is the BTC dominance, the bottom two graphs are from different exchanges, but they are all showing the charts of BTC to dollar or USDT. So let’s go into our weekly timeframe first to see what actually happened during the previous week. Well, we can see that if I switch the drawings off, we can see that the previous week was a nice example of accumulation. Looking at the candle, we didn’t change much in terms of the price.
The price went above a certain level, but then the price finished in exactly the same region as it actually started. So this week we can see that we started with a nice increase from 5800 straight into the 6300 where the bitcoin price is trading right now at the moment of the recordings, but the most interesting stuff is going to happen when we’re going to go into the future charts. So let’s do it straight away.
Bitcoin Futures Price Overview
Let’s start with the CME’s Bitcoin Futures.
Go into the daily and switch on all our drawings and indications from the previous review. So what we can clearly see here is, obviously, the gap that emerged from the close on the 27th of March and the opening of the 31st of March, which is this Monday. This gap has a very nice chance of being fulfilled, to be honest because we are in this accumulation zone. So if we go to the 4-hour chart, we can see that if we can break above the 50MA we can hold above it.
There is a nice opportunity for this gap to be filled straight away, and this is a nice 5 percent profit quite easily there. However, the long term analysis as we represented, we were expecting the price of the futures for BTC to go further down. We still have to see this divergence over here which hadn’t occurred yet.
The price went above the 50 RSI, so what we’re expecting for maybe the next two weeks is that the price stays in this accumulation area, and then we need to see some kind of a divergence on the error side before we can understand if the price is reversing and trying to break above this accumulations zone. But so far, you can see that the volumes were extremely low on the 25th and 26th of March, very, very low volumes. It obviously correlates quite a lot with what’s happening on the traditional stock markets and especially in America. We’re not going to go into huge details about that, but you can see the turmoil, which is occurring right now on all sorts of markets. It obviously has a great correlation and effect on the BTC, especially in terms of the volume.
BTC Dominance Analysis
The dominance obviously was going crazy again on the 13th, 14th of March, the 16th for March as well, so during the previous weeks we saw the very interesting behaviour of the BTC dominance, which means that several assets were flying extremely high in relation to the Bitcoin, that’s why the BDC dominance was going down. At the same time, we can see that some of the altcoins were actually dropping much harder in relation to bitcoin, that’s when we can see that Bitcoin dominance is going up.
However, this channel that we drew between the 62 percent and 69 percent was still holding it. We can say that we’re in a bit of an upward move based on the 4-hour chart, we’re above the 200MA. The main message of this graph is always to see whether Bitcoin is strictly dominating the altcoins and whether it is better to keep your overall investment portfolio in BTC or anything else like Ethereum, for example, or distribute it across the altcoins portfolio. In this case, the BTC is much better in terms of keeping your funds in the BTC as the main cryptocurrency, because you can see that the dominance is increasing, which means that during the increase of the cryptocurrency market we can see that Bitcoin is rising faster, in comparison to the altcoins.
Let’s go to the most interesting chart, which would be Bitstamp and let’s go to the daily time frame because this is the very nice outlook of what we can see over here. So let’s stop on this one for a moment and let’s just pause here and reflect on what was actually happening starting from the 25th of June. So this was the peak in the year 2019. And after that, we actually repeated, we can say it like that, the bearish market of 2018, so we saw the accumulation and the triangle, we saw them break away from the triangle, we saw the huge increase again, then the bearish movement and now another phase of accumulation which happened in November and December. Again, a huge peak in January and the massive drop, obviously, in March.
So, you can see that, even just by spelling it out, it seems like we are having a certain pattern of, obviously, the growth, then the consolidation in a bearish mode, then we usually see the accumulation in terms of the funds and then a spike in the price. The bearish, the accumulation, the spike in the price. The bearish accumulation, the bearish zone, the accumulation which is occurring right now, and then we expect the spike. Obviously, the huge question is when the spike will occur. And all the time when we are looking in the accumulation zones, you can see a very nice pattern which is emerging.
It is the divergence of the RSI, the RSI was getting larger and larger, it was increasing while the price was staying the same. And if we will see something like this forming over here, in this zone, in particular, this will signify that this is, first, an accumulation zone, secondly, that the closer and the closer the RSI index will be towards the 50MA and the higher levels you will see on the RSI indicator, the closer we’re getting to the spike of the BTC price. So currently the price will be trading between the 6800 and 5700. I believe this will be the channel in which the price will actually hold for some time. Then, just before the break, it would be nice to see the drop of the price and the sharp drop of the price, maybe just a shadow of a candle below this level to take out all the stops for the long term positions and then without them go up. This will be the very best scenario for the large traders who are currently accumulating the portfolio.
In the short term what we can see on the Binance exchange is actually the flat scenarios, so wouldn’t encourage you to trade, actually, during that phase of the market. First of all, the uncertainty is quite high in relation to the overall traditional markets. Secondly, the volume is extremely low. We can see that we’re currently stuck in this horizontal channel. And with such a low volume and a horizontal channel, and the uncertainty, the market will try to trick you.
There will be massive explosions of the price, there will be massive drops of the price, which can easily be retraced back to the price where this drop or pump started. So, in terms of the BTC price, in particular, we are currently just monitoring the market, we’re trying to stay out of the market in this particular time. There is no evidence that the market is trying to build up the strength for the next move, either up or down. We just see that, in this phase, there is a certain accumulation which is happening, and you can definitely see it, based on the horizontal volumes and obvious spikes in those horizontal volumes.
So let’s look now at the Ethereum price and what’s happening with the Ethereum. Again, over here we can see the consolidation, we can even put it in a triangle of something like that. Overall, I think this scenario is very, very similar to the Bitcoin price. We can see that the price is accumulating, we can see the huge horizontal volumes which are building up in levels of between 122 and 140 dollars for Ethereum. We can also see that in order to predict the huge move, either up or down, we need to see the divergence on the RSI, however, currently, it’s not happening.
We’re still in trend for our analysis of the huge drop before the price starts to move up. And this is exactly what we’re expecting, even though we’re trading in the upper part of that channel that we originally predicted, this will be a very nice move that the price can drop even the next 20 percent, touch this area and then start the pump immediately after that. The worst-case scenario is that we are gonna see the future fall in the price, a very steady fall with a fall in volume, going towards the area of 112 dollars.
And then after that, we might see another huge drop because if we go into the daily time frame, this drop below the body of the candle, below the 107, will give us the divergence on the daily RSI. And this is something to look forward to if we’re expecting the price to have at least a short retracement towards the 50MA on a daily chart.
Okay, guys, that was it for this week. Thank you very much for watching, please subscribe to our YouTube channel to stay tuned with our weekly updates on the BTC price and Ethereum price, and best of luck with your trading
Seems it is a great time now to buy bitcoin, have you already bought one?
What does a positive Coinbase premium mean for Bitcoin’s price?
Bitcoin’s price action on Coinbase has stood the test of time, especially since the crypto-exchange’s user statistics have often highlighted institutional participation in the market. The current Bitcoin bull run is largely influenced by institutional demand and buying. By extension, price action on Coinbase and other metrics can be deemed to signal traders’ sentiment too.
In that regard, one key metric is the Coinbase premium. With Bitcoin’s price strictly rangebound under $50,000 at press time, the Coinbase premium has turned positive, based on data from CryptoQuant.
Since the Coinbase premium turned positive, a positive change in Bitcoin’s price in the short run can be projected. Here, it is worth mentioning that for a while, the same metric was in the negative.
Further, another metric that was looking extremely bullish at the time of writing was the Spent Output Profit Ratio.
Based on the SOPR chart from Glassnode, the bull run may make a comeback in phases. The highlighted regions in the attached chart signal the points where the bottom and top were reset. This happened in mid-January, the last week of January, and on 26 February 2021. For the same, there are a few signs to look out for and each would further support the Bitcoin narrative.
One of the top signs is consistently positive Coinbase premium. Other signs from miners include increased inflows from miners on top exchanges, with the same fueling selling pressure on Bitcoin. When selling pressure hits a peak, the price drops as it did from the $58,640- level.
The complete reset of the Bitcoin Futures funding rates is yet another sign. The funding rate was reset, based on the SOPR chart from CryptoQuant, with the same underlining that Bitcoin lows and tops had been reset too. It is common for traders to bet high on leverage, long credit, and consequently, short volume. However, the cycle is complete when the volume increases and the price of Bitcoin pushes the leverage even higher.
Finally, there are other metrics like the Grayscale Bitcoin premium that has turned negative and signaled a drop in institutional demand. What does this entail? That’s a tricky question to answer. What’s evident, however, is that the two metrics are offering contrasting views on Bitcoin’s price performance.
Sign Up For Our Newsletter
While Washington dithers, Wyoming and other US states mine for crypto gold
The United States is divided politically these days into red states and blue states, and increasingly, it seems to be fracturing into cryptocurrency-friendly and crypto-wary locales, too. On Feb. 21, it was revealed that San Francisco-based Ripple Labs had registered as a Wyoming business. Wyoming is arguably the most blockchain and cryptocurrency-welcoming state in the United States.
Meanwhile, several days later, New York State’s attorney general announced a settlement of the office’s long-standing investigation into crypto trading platform Bitfinex for illegal activities. As a result, Bitfinex and affiliated Tether must pay $18.5 million for damages to the state of New York and submit to periodic reporting of their reserves.
Wyoming and New York — poles apart on the crypto regulatory spectrum — were both making industry headlines in the same week in other words. The irony wasn’t lost on Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission and now a senior fellow at Harvard University at Kennedy School, who told Cointelegraph:
“Federal regulation of crypto assets is like swiss cheese — full of holes — and that has meant a smorgasbord at the state level, with Wyoming actively luring crypto businesses and the New York attorney general bringing aggressive enforcement actions as we saw this week with Tether and Bitfinex.”
Whether this “smorgasbord” is a good thing is a matter of some debate. Crypto havens like Wyoming can be centers of innovation, pushing a potentially revolutionary technology further forward, as Wyoming’s recently elected U.S. Senator Cynthia Lummis emphasized this week in a Chamber of Digital Commerce panel discussion with Miami’s Mayor Francis Suarez, another crypto enthusiast.
A complex fabric
But it also leads to regulatory uncertainty that gives entrepreneurs a case of hypertension. As Stephen McKeon, an associate professor of finance at the University of Oregon, told Cointelegraph: “Our regulatory system is a complex fabric of multiple agencies at both the state and federal level.” He further emphasized that “they need to coordinate on the topic of crypto assets because this asset class doesn’t map cleanly to the existing regulatory structure.”
Asked if, from a business standpoint, Ripple and others were making a smart business move registering in crypto-warm states like Wyoming with a higher degree of regulatory certainty and freedom — as well as lower taxes — McKeon added: “Businesses strive to reduce regulatory uncertainty. If moving to Wyoming helps to achieve that objective, then it’s a smart move.”
Others could follow Ripple. Zachary Kelman, managing partner at Kelman Law, told Cointelegraph: “Many crypto projects fled New York after the introduction of the onerous BitLicense back in 2015. I expect more projects to relocate in Wyoming, as well as other crypto-friendly states like New Hampshire.”
Wyoming created a stir in 2019 when its legislature authorized the chartering of special purpose depository institutions, or SPDIs, that can receive both deposits and custody assets, including cryptocurrency. The state’s banking division itself acknowledged that “it is likely that many SPDIs will focus heavily on digital assets, such as virtual currencies, digital securities and utility tokens,” though they could also deal with traditional assets. SPDIs can’t make loans like traditional banks, however.
Kraken Bank was the first business to receive a Wyoming SPDI bank charter in September 2020, followed by Avanti Bank and Trust in October, and there are “three more [SPDIs] in the pipeline” said Lummis at the Chamber of Digital Commerce’s Feb. 25 event. Avanti founder and CEO Caitlin Long had earlier suggested that Wyoming’s SPDIs potentially were “a solution to the #BitLicense problem” faced by crypto companies because “New York law exempts national banks from the BitLicense.”
But even though the Wyoming SPDI’s are state-chartered institutions, not national banks, “federal law protects parity of national banks and state-chartered banks,” continued Long, and following that logic, she concluded that SPDIs represented “a passport into some 42 U.S. states without the need for additional state [crypto] licenses.”
An accident waiting to happen?
Not all are enthralled by Wyoming’s new special-purpose banks, though. The Bank Policy Institute suggested that Wyoming’s SPDIs could be an “accident waiting to happen.” The BPI noted in September that Kraken was “the first digital asset company in U.S. history to receive a bank charter recognized under federal and state law” but warned that its business model “is inherently unstable under stress” because the new bank is funded by uninsured, demandable retail deposits “and relies on a pool of assets such as corporate bonds, munis and longer-term Treasuries to fund redemptions under stress.”
David Kinitsky, CEO of Kraken Bank, in a conversation with Cointelegraph, said that he believes the BPI blog post “comes from a lobbyist group funded by, and working on behalf of, the world’s biggest banks” and rests “on a slew of faulty assumptions,” adding further:
“[It’s] comical and hypocritical that they think their fractional reserve model along with its total reliance on asset exposure and interest rate environment is somehow less risky than a full reserve custodian bank that won’t do any lending and has a diverse set of adjacent revenue streams.”
Others have opined that innovation centers like Wyoming were merely filling the void left by the federal government, which has yet to take a coherent stance vis-a-vis the burgeoning crypto market. Benjamin Sauter, a lawyer at Kobre & Kim LLP, told Cointelegraph: “Wyoming is showing that individual states can play a meaningful role in crafting a coherent legal framework for the crypto/blockchain industry — particularly when it comes to state taxation as well as commercial and some banking issues.”
By comparison, according to him, the U.S. federal government “hasn’t really made an effort to create such a framework, and this has led to a lot of regulatory inefficiencies and general confusion.”
Innovator or loophole?
So, what about the notion that Wyoming merely created a means for its new banks to lure firms and investors based in more regulated states like New York? Kelman told Cointelegraph on the matter: “Many institutions operate entities all over the world, not just the United States. New York has jurisdiction over New Yorkers — but not any company related to a company that has had operations there.”
“Wyoming can and is becoming a center for crypto business and innovation,” Kinitsky told Cointelegraph, adding: “Certainly, there are ready similar examples within financial services like the credit card industry in South Dakota and ILC banks in Utah….SPDI banks have similar frameworks for being able to operate across the country and indeed internationally.”
McKeon agreed that Wyoming was following the South Dakota playbook: “South Dakota created favorable legislation for banks around interest rates and fees in the 1980s and now has one of the highest concentrations of bank assets in the U.S.,” adding further:
“By creating an environment that allows crypto projects to operate with a higher degree of regulatory certainty and freedom, Wyoming is likely to attract similar relocation within crypto.”
Will others join in?
Of course, other states could follow Wyoming’s lead. Kelman said: “I also expect larger states, like Florida, to follow suit with more crypto-friendly guidance, especially after Miami Mayor Francis Suarez’s overtures to the crypto community.” However, he further stressed that “given Wyoming’s small size and relative obscurity, I don’t know if it will remain a haven for an entire industry in the way Delaware has been for incorporations and corporate governance.”
As reported, Mayor Suarez is looking to develop some of “the most progressive crypto laws” and proposing within his jurisdiction innovations like paying city workers’ wages in Bitcoin (BTC) and purchasing BTC for the municipality’s treasury. Senator Lummis applauded the mayor’s initiatives at the Chamber of Digital Commerce’s panel, inviting him to “look at Wyoming’s legislative framework as a template and then build on it” by developing new Bitcoin “components,” including a pension plan for Miami workers that includes Bitcoin — something Suarez is looking into.
Multiple innovative centers like Miami and Wyoming, among others, could advance technological progress generally, she suggested. Suarez, for his part, said: “One of the things that we want to do is imitate Wyoming’s very successful integration of crypto into their community.”
Meanwhile, Avanti’s Long remains an ardent booster for her state: “Why should crypto companies redomicile to Wyoming?” she asked rhetorically on Feb. 21 following the news that Ripple Labs had registered as a Wyoming limited liability company, adding:
“No state corp tax, no franchise tax, crypto exempt from property & sales tax, our commercial laws clarify crypto legal status, crypto-friendly banks opening soon, access to crypto-open gov/legislators/US senator — all laws open-source.”
Is Wyoming good for BTC adoption?
What exactly do these tech-friendly states and cities mean for cryptocurrency adoption? Sauter was cautiously optimistic: “It’s possible that Wyoming’s efforts will have some trickle-up effects, should the federal government ever get its act together.” He stated further that there is also a major risk as businesses may be “lulled into a false sense of security and potentially conflating Wyoming’s regime for compliance at the federal level.”
Kinitsky told Cointelegraph that the convergence between crypto and banking, as is happening in Wyoming, “portends an important step toward mainstream adoption,” while McKeon added that crypto users “are primarily concerned with access to products and features. Better products translate to increased adoption.” Therefore, if Wyoming-type legislation enables crypto projects “to provide new and desirable features by mitigating regulatory risk for the providers, then it will be a positive force for general public adoption.”
Many, though, still seem to be treading water until the federal government acts to provide some legislative/regulatory structure to the nascent blockchain and cryptocurrency industry. According to Sauter, “as great and encouraging Wyoming’s recent actions are, there is only so much one state can do.” Massad also told Cointelegraph:
“This regulatory confusion creates higher costs and uncertainty. There’s still plenty of money and talent in this country flowing into crypto innovation, but we need greater regulatory clarity to ensure investor protection, financial stability and responsible innovation.”
India: Are authorities really seizing crypto hardware wallets?
While the lack of regulations for cryptocurrencies has evolved into a problem in India, crypto-users in the country have not been discouraged yet, with many seeking ways to get on the same page as lawmakers. However, there is a very problematic lack of clarity among users, especially since such regulations (Or lack thereof) make compliance a very difficult job.
According to a recent post by Crypto Kanoon, a legal information portal for the country’s crypto-users on Twitter, Indian authorities have now turned their attention to crypto hardware wallets by making very deliberate attempts to seize them. The tweet in question read,
“Breaking: News of Crypto Hardware Wallets being ciezed by the Flag of India customs department is coming.”
While avenues to use cryptos have not been fully shut yet, their use has become increasingly difficult thanks to muddy rules. Given the fact that the bull run is in progress, India is seeing greater interest in crypto-investments. In light of the need to be in charge of one’s own cryptos, many new entrants to the crypto-market have been turning to crypto hardware wallets.
However, along with Crypto Kanoon, several prominent Indian crypto-influencers are also claiming that such purchases are being flagged by the Customs department of the country. For instance, Naimish Sanghvi, Founder of CoinCrunchIndia, shared the screenshot of a message shared by a “verified source.” It read,
Custom officials are not allowing imports of Crypto hardware wallets!
This was shared by a verified source! pic.twitter.com/fM0lh3shUO
— Naimish Sanghvi (@ThatNaimish) February 27, 2021
Here, it must be stressed that the veracity of this claim was still in question at press time, especially since no customers had actually come forward to claim anything of this sort. In fact, no official notification or circular from any government agency asserting a ban on Bitcoin wallet imports had been found either.
It is also worth noting that crypto hardware wallets continue to be available online, on Amazon, as well as on Etherbit. The latter, a popular reseller that has Ledger, Trezos, SafePal wallets in stock, has lately been noting shipping delays on account of a “sudden spike” in global demand for wallets and “rumors of crypto-ban in India.”
While everything is up in smoke right now, what is evident is that reactions from the crypto-community have been furious. Despite the fact that such reports are yet to be confirmed, many in the crypto-community believe that this once again highlights the antagonistic attitude of the government towards digital assets. With rumors of a crypto-ban in India swirling about, speculations such as these are unlikely to win the government any crypto-fans.
AMBCrypto has reached out to Crypto Kanoon, Etherbit, officials of the RBI, and some users for clarity on the issue and will update the story accordingly.
Sign Up For Our Newsletter
Ankr adds Eth2 futures (fETH) to its staking system
Peter Schiff Now Discusses Bitcoin More Often Than His Beloved Gold
Long Blockchain Corp has officially been delisted by SEC
NFT Platform Ethernity to Launch IDO on Polkastarter
NextGen Blockchain Platforms Self-Organize to Win Government Contracts
Bitcoin falls to $45K in sequel to 20% BTC price crash
Optimized Ethereum Mining Settings for Nvidia RTX 3060 Ti, RTX 3070, RTX 3080 and RTX 3090 GPUs
New report predicts NFTs will explode in popularity during 2021
Bitcoin Price Analysis: 22 February
MoneyGram suspends Ripple partnership, citing SEC lawsuit
Kraken users demand refunds over flash-crash liquidations
Elon Musk Reacts to Tesla Losing $15 Billion After Investing in Bitcoin
Gemini collaborates with The Giving Block and others, adds donations option
Bitcoin Cash, Dogecoin, Monero Price Analysis: 22 February
Leading DeFi Projects to Follow in 2021
$24 million lost in second-largest day of DeFi liquidations
Altcoins and DeFi sell-off after Bitcoin’s 17.6% correction below $50K
Ethereum (ETH/USD) Falls 26% From Historic High; What’s Next?
Crypto influencer warns Ethereum fees will drive users away
XRP, Basic Attention Token, Compound Price Analysis: 23 February
Blockchain5 days ago
Ankr adds Eth2 futures (fETH) to its staking system
Blockchain1 week ago
Motley Fool adding $5M in Bitcoin to its ‘10X portfolio’ — Has a $500K price target
Blockchain1 week ago
The Graph adds support for Polkadot, NEAR, Solana and Celo
Blockchain6 days ago
Ripple now registered as a Wyoming business
Blockchain6 days ago
Former BoE, BoC Governor Mark Carney joins Stripe board of directors
Blockchain5 days ago
Peter Schiff Now Discusses Bitcoin More Often Than His Beloved Gold
Blockchain1 week ago
Blockchain1 week ago
Nvidia Announced the CMP HX Dedicated GPUs for Professional Crypto Mining