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?
Bad guys can’t cash out their loot in 2016 Bitfinex hack
Assets stolen from Bitfinex crypto exchange in a hacking incident back in 2016 will take over a century to be cashed out, blockchain intelligence firm Elliptic said in its latest report.
On Thursday, the company published a statement about the infamous hack that resulted in Bitfinex losing 120,000 bitcoin (valued today at around $7 billion). It detailed nearly 80% of the illegally obtained funds are still in the hacker(s) wallet.
The remaining 21% have been moved around by the malicious cyber attackers that have only managed to launder 4% of their total haul, which is approximately $270 million.
A roadblock for the attackers
Elliptic pointed out that the reason for their thesis is the evolution of crypto tracking tools, regulations, and law enforcement methodologies that make stolen or ill-gotten digital assets very challenging to cash out today.
The intelligence company explained that the hackers used “peel-chains” to exchange the stolen funds. In this method, crypto tokens are moved around numerous times, moving fast from wallet to wallet, and only a small amount of the bitcoin is “peeled off to their actual destination along the way.”
Back then, it was extremely hard to track crypto-assets laundered using this method. But today, the emergence of automatic tracing systems capable of determining the ultimate source or funds in an address makes the job a lot easier for the authorities.
The hacker after the cyber attack
After the successful attack on Bitfinex in 2016, the laundering process started in 2017 through the largest darknet market that time – Alphabay. Later that year, it was shut down by law enforcement, prompting the move to Hydra – the biggest illegal marketplace today.
Cryptoslate cited part of the report from Elliptic, stating, “After a hiatus in 2019, the launderers returned to Hydra in 2020 and are currently depositing $3 million of the stolen bitcoin every month.”
According to the report, to date, there is now approximately $72 million worth of the stolen cryptocurrency sent to Hydra.
Image courtesy of Cointelegraph News/YouTube
Three reasons why Cardano is going on this price trajectory
Rising trade volume across spot and derivatives exchanges have supported Cardano’s ongoing price rally over the past few weeks and months. The altcoin, at the time of writing, was trading at the $2.32-level, with the crypto gaining by 20% in 24 hours to touch one ATH after the other. The aforementioned hike in price and trade volume were evidenced by the increase in market capitalization as well.
Thanks to the aforementioned factors, Cardano is now ranked third among the market’s top-10 altcoins, based on data from CoinMarketCap.
What’s more, based on the attached chart, currently there is more ADA staked than in the past 30 days. In fact, it is at nearly half a million. With 100% of its HODLers profitable at the press time price level, ADA’s rally is likely to be a long one, especially with the altcoin’s staking rewards data offering a similar conclusion. With a relatively high percentage of ADA staked, a direct relationship has emerged between staked ADA and ADA’s price.
While the current on-chain sentiment is slightly bearish, the net network growth stood at a positive 5%. Further, while there has been a slow drop in large transactions, that could mean that more retail traders are buying ADA v. HODLers and institutions. Unless trade volume drops and cascading sell-offs occur, the price is likely to hold at its current price level.
In the case of Cardano, the concentration by large HODLers has remained largely below 30% and this is key to its ongoing rally. Top memecoins and altcoins that are rallying like DOGE, LINK, BNB, and ETH, among others, have a high concentration by large traders. This is essential to supporting the price at its key levels.
$80 billion worth of large transactions have transpired over the past week and the inflows are anticipated to increase even more. Less than 15% HODLers have held ADA for over 12 months, despite YTD gains of over 500%. And, ADA’s HODLers are lower in numbers than expected. Ergo, the short-term ROI could be the key reason for the short HODLing duration.
Based on data from Messari, the ROI over the past week was nearly 40%.
In the past year, the ROI was over 700%. This is a relatively high gain for HODLers, despite several dips.
ADA’s latest developments and the increasing demand in the second phase of the altseason make it one of the hottest altcoins to buy and HODL. In fact, one can argue that ADA continues to remain undervalued at the press time price level.
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Data shows the ‘Bitcoin price drops ahead of CME expiries’ claim is a myth
Historically, activity surrounding the Bitcoin (BTC) monthly futures and options expiry has been blamed for weakening bullish momentum. A few studies from 2019 found a 2.3% average drop in BTC price 40 hours before the CME futures settlement date.
However, as Cointelegraph reported in June 2020, the effect faded away. While 2020 seems to have rejected the potential negative impact of CME expiries, so far, the current year appears to validate the theory. Bitcoin’s price has been suppressed ahead of futures and options expiry in the first three months of 2021.
Some investors and traders have pointed out that Bitcoin’s incredible rally after the recent futures and options expiry dates has become a trend.
$BTC options expiry in about 8 hours…
Last Friday of every month has been a pretty good entry point for past 8 months …
Past 3 months price has been hammered in the hours / days leading up to expiry
Observation not advice. Let’s see if the pattern holds. pic.twitter.com/3CJqI6m6jl
— 阿龍 (@KnutsonJesse) April 23, 2021
BTC has effectively rallied in the days following the expiry, but expanding this analysis uncovers a less-than-satisfactory trend.
Three consecutive events don’t prove a trend
The past 13 months have been nothing short of spectacular for Bitcoin, as the cryptocurrency posted 788% gains. August 2020 turned out to be the worst month, as BTC presented a 7.5% negative performance. Thus, choosing random starting points within the month will likely show a similar positive trend.
For example, if one uses the “last quarter” moon phase as a proxy, the odds that a rally takes place after each event are very high.
As depicted above, indeed, Bitcoin rallied after five out of the last six instances. The only conclusion might be that positive trends are the norm rather than the exception during bull runs.
Although there might be some explanation to the reason behind Bitcoin’s end-of-the-month underperformance, these are only hypotheses.
While market makers and arbitrage desks could benefit from suppressing the price after a rally, other forces, including leverage futures longs and call option holders, would balance that out.
Bitcoin price did not drop in three of the last seven expiries
Therefore, it makes sense to analyze the potential price suppression ahead of the expiry instead of looking for explanations for a rally during a bull market.
Both October and December 2020 expiries failed to present any negative pressure ahead of such dates. Meanwhile, the 12% positive performance on the five days that preceded the most recent April 30 expiry also puts a big question mark on how meaningful the CME event really is.
Considering there hasn’t been a price decrease ahead of monthly futures and options expiries in three of the last seven instances, this evidence should put a nail in the coffin of the unfounded myth.
As mentioned earlier, trying to develop theories on why sellers acted more aggressively on specific dates is unlikely to yield results.
As shown above, Bitcoin’s price failed to underperform in three out of the last seven expiries. A 57% success rate should not define a trend when a positive performance after a specific date has been proven common during a bull run.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
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