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Dollar Shorts Break Records

Dollar shorts break records, Jan 2021Short selling on the dollar has reached new highs according to Scotiabank, one of Canada’s big five banks. “CFTC data reflected the largest week-to-week turn against the dollar since early-Aug…

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Short selling on the dollar has reached new highs according to Scotiabank, one of Canada’s big five banks.

“CFTC data reflected the largest week-to-week turn against the dollar since early-Aug 2020 with the USD’s net short reaching its highest mark on record (in dollar terms) at USD35bn on the back of a USD3.7bn increase in favour of the currencies that we track,” they said in a just published note.

The Euro in contrast has seen a rise in longs by $1.8 billion over last week, with this rise apparently due to some shorts closing.

Gold is still net long, Scotiabank says, but that bullishness is decreasing in part because many gold investors are diversifying to bitcoin.

Dollar index, Jan 2021
Dollar index, Jan 2021

The dollar has slightly bounced from its big support at 89, the lowest level since March 2018.

However its still far off from the lows of the banking crash in 2008 when it dropped to 71, the lowest on record.

Yet the unprecedented measures to fight the pandemic are magnitudes higher than in 2008, with Biden just recently announcing plans for a $2 trillion stimulus on top of the circa $3 trillion last year.

That $5 trillion total accounts for 25% of the GDP for a government already heavily in debt at $28 trillion.

Concerns are a rise in yields could make this debt unserviceable without what at that point would be more expensive borrowing, forcing the FED to buy it out, which itself could cause more inflation.

Food prices are up by some 2% in the west while in countries like Brazil they’re up 15%. Meaning the purchasing power of money is falling.

In addition as the economy is in big trouble especially as some British officials say lockdowns may continue until autumn, any tightening measures this year appear unlikely, with the dollar devaluation the only ammo left for Fed.

That could force Europe to devalue as well to make its exports more competitive, while China is trying to build a wealthy middle class so they’re happy with letting the Yuan strengthen to make imports cheaper.

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TA: Bitcoin Price Back Below 100 SMA, Why BTC Could Retest $45K

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Bitcoin price failed to stay above $50,000 and $49,000 against the US Dollar. BTC is now below the 100 hourly SMA and it is likely to continue lower towards $45,000

  • Bitcoin started a fresh decline below the $50,000 and $49,000 support levels.
  • The price is now trading well below $50,000 and the 100 hourly simple moving average.
  • There is a connecting bearish trend line forming with resistance near $49,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could extend its decline towards $45,000 as long as it is below $50,000.

Bitcoin Price Turns Red

After forming a short-term top near the $52,600 level, bitcoin started a fresh decline. BTC traded below the $51,200 and $50,000 support levels to move back into a negative zone.

There was also a break below a major bullish trend line with support near $49,500 on the hourly chart of the BTC/USD pair. The pair even broke the $48,000 support level. There was a clear break below the 50% Fib retracement level of the upward wave from the $43,050 swing low to $52,650 high.

It is now trading well below $50,000 and the 100 hourly simple moving average. It seems like the bulls are trying to protect the 61.8% Fib retracement level of the upward wave from the $43,050 swing low to $52,650 high.

Bitcoin Price

Source: BTCUSD on TradingView.com

If they fail and the price trades below $46,500, there are chances of more losses. The next key support is near the $45,000 level, below which the bears might aim a test of the $43,000 support zone.

Fresh Increase in BTC?

If bitcoin stays above $46,500, it could correct higher. An initial resistance on the upside is near the $48,000 level. The first major resistance is near the $49,000 level and the 100 hourly simple moving average.

There is also a connecting bearish trend line forming with resistance near $49,000 on the same chart. To move into a positive zone, the price must clear the trend line resistance and then gain pace above the $50,000 barrier.

Technical indicators:

Hourly MACD – The MACD is now gaining momentum in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well below the 50 level.

Major Support Levels – $46,500, followed by $45,000.

Major Resistance Levels – $48,000, $49,000 and $50,000.

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Source: https://www.newsbtc.com/analysis/btc/bitcoin-btc-could-retest-45k/

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Analyst tells Tesla to dump Bitcoin for buybacks as shares plunge alongside MSTR’s

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A former equities CIO of Goldman Sachs drew an strong response on Twitter after suggesting Tesla should sell its Bitcoin and buy back company shares.

The price of TSLA shares have fallen 28% from $863.42 to $621.44, since news broke on Feb. 8 that Tesla had made a $1.5 billion BTC acquisition.

MicroStrategy’s shares have fared even worse in the short term. The company, which is headed by Bitcoin bull Michael Saylor and just completed its latest acquisition of $15 million in BTC on Mar. 3, is now down 50% from its all-time high of $1,315 from Feb. 9.

Tesla’s share market woes are likely due to a number of factors. In early February, it was reported that Tesla had been reprimanded by the Chinese government over quality control issues after receiving consumer complaints. The broader stock market has also experienced volatility, with the S&P 500 down 4.1% in the last 30 days. 

But the tweet from longtime Tesla analyst Gary Black, who has several decades of financial management experience, sparked a debate on whether Tesla’s purchase of $1.5 billion in Bitcoin last month had benefited investors.

“I don’t want them buying back stock,” said Twitter user Techgnostik. “I want them investing in growth, and making another billion on their BTC position.”

Black countered by suggesting TSLA would also draw inclusion by more fund managers with a share buyback program, considering it of greater value to the investor than buying BTC “with excess cash.”

Some users on Twitter agreed that a stock buyback seemed to be a more appropriate use of funds, while others felt too much attention was being paid to what Tesla did with 8% of their cash reserves.

It’s not easy to ascertain the impact buying Bitcoin has had on a company’s bottom line. While MicroStrategy’s share price has halved in a month, shares of MSTR are still up 340%, (from $146.63 to $645.66), since the company announced its first purchase of 21,454 BTC on Aug. 11, 2020. The price of BTC is currently up 310% from the same date.

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Source: https://cointelegraph.com/news/analyst-tells-tesla-to-dump-bitcoin-for-buybacks-as-shares-plunge-alongside-mstr-s

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Experts divided on BTC predictions: Bullish or super bullish?

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Despite the current battle between Bitcoin bulls and bears around the $50,000 price mark — and an 8.7% pullback over the past 24 hours — a raft of analysts and commentators have got out their crystal balls to tip a glittering future for Bitcoin prices.

On Mar. 4, Senior Commodity Strategist for Bloomberg Intelligence Mike McGlone pointed to historical data to suggest that Bitcoin is on the way to $100,000.

McGlone’s logic revolves around the growing discount for shares in the Grayscale Bitcoin Trust which is at the same level as last year’s Black Thursday collapse. The discount refers to when shares in the Grayscale Bitcoin Trust trade for less than the value of the underlying Bitcoin (normally they trade at a premium).

Looking at historical data, said that

Twitter user “Lee Hendricks” wasn’t convinced, suggesting the catalyst for Grayscale’s discount could be the result of pressure from upcoming ETFs and other crypto funds. (Although that’s arguably bullish too.)

The Bloomberg strategist isn’t the only expert with high expectations for BTC, with influencer and YouTuber Lark Davis stating on Mar. 4 that “we are just now past the first major price wave,” with two more, larger waves to come.

On March 2, technical analyst Kaleo posted a chart predicting BTC will hit $100,000 near the start of April this year.

It’s a follow-up on his “Bitcoin Halving Reward Era Price” analysis chart two years ago predicting the price would reach $200,000 around mid-2021. He tweeted two weeks ago that he still has faith in it:

“It is by far the most accurate, long-term chart prediction I’ve ever seen for Bitcoin… $BTC will hit $200K+ this cycle.”

Another analyst who goes by the Twitter name MasterChangz, told his 10,000 followers he believes Bitcoin will hit the $200,000 mark even earlier than mid-2021, potentially at the start of April. The next rise, he said, is to $77,000 over the next two weeks.

Other predictions are even bolder with Kraken CEO Jesse Powell stating the cryptocurrency could reach $1 million or even “infinity” in a Bloomberg television interview on Mar. 4, adding that it will eventually become the world’s currency.

“We can only speculate, but when you measure it in terms of dollars, you have to think it’s going to infinity,” he said. “The true believers will tell you that it’s going all the way to the moon, to Mars and eventually, will be the world’s currency.”

Kraken Head of Growth Dan Held, echoed this prediction on Mar. 5, claiming on Twitter that:

“Bitcoin is more likely to hit $1,000,000 than $0.”

Even past Bitcoin skeptics are becoming crypto converts with investment firm Sanders Morris Harris CEO George Ball admitting to Yahoo Finance on Mar. 4 that he believes cryptocurrencies are now “attractive” as a “small part” of any portfolio.

“With the cryptocurrencies, I think there is a fundamental hydra-headed shift that makes them attractive as a part, a small part, of almost any portfolio,” Ball said.

Despite this wave of optimism, history also suggests March could be a bloody month, with Bitcoin’s price falling across the month in six of the past nine years by an average of 5.8%. The most recent of these occurred last year on Black Thursday when the price plunged by 50%. That said, the second-biggest monthly candle in BTC history happened in March 2013, when the price shot up 179%.

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Source: https://cointelegraph.com/news/experts-divided-on-btc-predictions-bullish-or-super-bullish

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