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Massive Bitcoin Drop. Wait for the Bottom

In this episode, we will look at the recent drop of the top crypto assets and what to expect from this drop. Bitcoin crash is expected.

Republished by Plato

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In this episode, we will look at the recent drop of the top crypto assets and what to expect from this drop. As usual, we will consider the factors in favour of the continuation of the downward trend and the signals to look for in the nearest future to identify the local bottom.

As usual, you can see the four different charts, all related to Bitcoin. The one on the top left is the BTC futures and top right is the BTC dominance and in the bottom, on the left is Bitstamp with the longest history and the one in the bottom right is Binance where we trade. So, let’s go straight into the content. 

bitcoin price charts

As usual, we’re starting from the weekly overview, so you can see in front of you the weekly candles. And obviously, the most important thing is that the wall during the past week, we saw a huge move below the 50 Moving Average (MA). And at the same time, this happened over the weekends because the actual candle on the futures was green. So, it means that from Monday till Friday last week or going up and during the weekends we’ve had this huge dump below the 50MA. So, we passed the support level straightaway. On the futures market, we have seen an increase in volume starting from the beginning of the year. So, from January till mid-February, we can see that there was an increase in volume. Now the volume is slightly dropping for the past couple of weeks.

And this can be one of the reasons why it was so easy to pass this particular support of 50MA on a weekly chart. So, let’s switch all our drawings from the previous weeks and go straight into the content. 

Bitcoin Futures Price Analysis (CME)

bitcoin futures price

So, go to the daily charts and going into more details on the future market. We expected this drop towards the area of 61 per cent, between 61 and 65 per cent of a Fibonacci retracement. However, it went even further down. You can see that the Monday move. So, starting on early Monday morning, there was still a downward move even further towards the area of 78 per cent of Fibonacci retracement. But this is exactly what we’ve been talking about last time.

So, we saw the retest of the 200 MA as a resistance. And from that point, we saw a huge drop towards the area where we were expecting the Bitcoin to be – 7900 BTC/USD. For now, the volume is not that great, even though it is higher than the volume during the previous week. But we will still want to see at least the higher volume and probably the divergence on the RSI will be another confirmation that we found a local bottom and somebody is buying bitcoin back.

And so that’s exactly what we expect. And based on the idea that we don’t see this yet and that was the move from the downward trend. So probably we’re going to go even further down rechecking this bottom at around 7300 BTC/USD. And this could be a further downward move for Bitcoin. We can probably go down even below 7300 BTC/USD if we’ll see an increase in volume during that time or we’ll see some area of consolidation. Same as we saw during the previous days.

So over here, there was a slight consolidation between the 200 MA and 50 MA. So this is exactly what we would be looking for in the area of 7200 BTC/USD. At the same time, it would be really nice to see the Divergence on the RSI. While the price will go down the RSI will start increasing. And this will be a signal, including the volume that somebody is buying back the Bitcoin at this level. So this is exactly what we’re gonna be looking for. For now, it obviously looks very heavily to the downside. And we’re not talking today about this gap in particular because this is a huge gap and it doesn’t seem and doesn’t look like it’s gonna close within this week.

This will be very surprising. So the example of such huge gaps are here in history and you can see it while going up. So you can see that this gap, for example, on the 14th of June, we had a massive increase of around 6 per cent. And then this gap was filled only during the September retracement of Bitcoin futures. So I wouldn’t say that we’re expecting this gap, in particular, to be filled year in the first week. It would be of later on, but it would not matter. At that time, because statistically, statistically speaking, we are just concerned about the 1-week projection. 

btc dominance

What we can see over here, we rechecked the zone of 65-66%. We were expecting to go a little bit higher towards the 200 MA to 68% BTC dominance, but we’ve stuck with 50 MA as a resistance, which is a good sign for us, which means that at this stage, the altcoin market can either depreciate slower, which is not usually the case for them, or we can see that some altcoins will be pumping even though the bitcoin is going down. Usually, there is a negative relationship with MATIC, for example, between BTC and MATIC.

Bitcoin BTC/USD price analysis on Bitstamp

bitcoin price bitstamp

We are using BTC/USD from Bitstamp primarily for the long-term analysis.

So again, the weekly overview. Weekly candles suggest that we’re in quite a good downward trend, even though on the 24th of February, we had a very strong bearish candle. On the second of March, it is still bearish. We crossed the 50 MA. So it’s not acting as a support right now. We are going to the local bottom, so it’s around 6900 BTC/USD.

And it looks like we are going to reach this bottom if it will be so, then our prediction, which we made a couple of weeks ago about this huge move and huge triangle and this is the big resistance line over here, which we didn’t touch yet, which means that we need to find another local bottom at this level of 6800 BTC/USD, an increase in volume, for example. All this will signify that somebody is buying back some of bitcoin and converted into long positions rather than short positions. We should go slightly below the level to take off some stock positions as well. And this will be a wonderful setup for the future growth in April, for example.

Bitcoin BTC/USDT price analysis on Binance

bitcoin price binance

Here we’re talking about the short-term trends. We touched there’s a local downward trend line. As we mentioned last time, it was holding us as resistance for some time. We still went through it. And then the level of 8500 BTC/USDT was broken with a very, very nice volume of very strong bearish candles.

You can see that this move overall went towards the next level of support, which is seven thousand eight hundred, which was a mark for us at this stage. You can see a nice and strong volume here. You can see that the RSI go towards the oversold region, which is quite a good indicator to start buying back a little bit of bitcoin. However, don’t rush into it. The usual confirmation I’m looking for is a divergence. So probably something like this.

We’ll see the retest of around 8300 BTC/USDT or maybe 8000 BTC/USDT because it’s just a good round number. And then another decrease, depreciation of the price to a level of 7600 BTC/USDT and if during that stage will have the RSI divergence on the 4-hour chart. This will be a nice signal to consider that we might see some local bottom and there will be a very short upward trend.

Ethereum ETH/USDT price analysis

ethereum price analysis

As usual, we’ll start from the weekly candlestick, same as bitcoin. During the previous two weeks, there was a very heavy drop with a very strong volume, especially on the week starting on the 24th of February. A strong bearish candle on the daily chart, we were talking last time that we went into that channel. Bounced from the bottom of the channel and went to the top of that channel and then a very strong candle yesterday, which broke everything, the upward channel, the 50 MA and stopped exactly at the price that we suggested last time – 200 ETH/USDT. And that’s that was exactly the point.

So, 200 ETH/USDT is a nice round number. Usually, the round numbers count as good areas of support and take in the historical overview that it was acting as a support line for several points in history. So what we’re expecting next is a further downward move. We’re currently between 50 MA and the 200 MA. So we’ll be consolidating a little bit, but it will look like this. So we should go and recheck this 50 MA. I mean, go down towards the 190 ETH/USDT. We should break the level of 200 ETH/USDT. This will be quite vital for us if the price will be quite slow in terms of its movement and we’ll stay in that horizontal channel.

So we will be able to see that the 200 MA start slowly to increase and it will act as the support at around 190 ETH/USDT. We don’t see any divergence here. You can definitely put a downward channel through the top like that. This at some point will act as a resistance. But at the same time what we are looking for right now is a short upward move towards the 50 MA to test that as a resistance now and then to check the 200 MA as a support. This can take a slightly more than a week, but again, taking into account what happened during the weekends, you can probably expect that some move towards the end of the week can be absolutely massive.

That was it for this week. Thank you very much. Please subscribe to our YouTube channel to stay tuned with our weekly reviews of Bitcoin and Ethereum price analysis. And best of luck with your cryptocurrency trading.

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Blockchain

Chainlink, Synthetix, Verge Price Analysis: 05 March

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The altcoin market showed that market bears were in the ascendancy over the past week, with the same likely to continue over the next few days. Chainlink approached an area of demand at $25, while Synthetix faced rejection at the $27-level. Finally, Verge flipped the $0.019-level to support, although this development could be short-lived.

Chainlink [LINK]

Chainlink, Synthetix, Verge Price Analysis: 05 March

Source: LINK/USD on TradingView

On the 4-hour chart, LINK registered rising bearish momentum as the RSI dropped below 50. It was noting a value of 40, at the time of writing, and faced an area of demand in the $24.8-$25.8 zone. This could see LINK bounce to retest the $27-level as resistance.

The imminent levels of interest seemed to be $27, as likely resistance, and $24.8, as support. A drop below $24.8 would see the bears push further and climb to touch the $23.24-level of support.

The $23.24-level has been tested as support multiple times since early February, and certain on-chain metrics did point to a fall in the number of LINK users, which, in turn, could see less demand and lead to further losses.

Synthetix [SNX]

Chainlink, Synthetix, Verge Price Analysis: 05 March

Source: SNX/USDT on TradingView

SNX was trading within a descending channel for the better part of February, and a few days ago, broke out of the pattern with a technical target of $27.

SNX tested the $24-mark as resistance but its attempts to climb any further were met with rejection. SNX has since steadily posted losses and lost the $21-level to the bears. The MACD formed a bearish crossover and began falling to show downward momentum.

Over the next few days, the $19.7 and the $18.5-$19 zone can be expected to serve as support.

Verge [XVG]

Chainlink, Synthetix, Verge Price Analysis: 05 March

Source: XVG/USDT on TradingView

The ascending trendline had some confluence with the retracement level at $0.019, and the market bulls were able to defend that level. Closing a trading session under the $0.0189-level would likely see XVG drop back towards $0.0165, while a breakout past $0.021 would be a bullish development. A move lower was the more likely scenario, given the general market conditions.

Even though the DMI showed the bullish trend gaining some strength in recent days, the trading volume was in disagreement with the rally. The Awesome Oscillator was moving above zero, but did not show bullish strength.


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Source: https://ambcrypto.com/chainlink-synthetix-verge-price-analysis-05-march

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Blockchain

The Flash Mint is here: WETH10 turbocharges the flash loan concept

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A team has released WETH10, the latest iteration of the Wrapped Ether token that allows using Ether (ETH) in a DeFi setting. WETH10 carries a host of useful features, the most notable of which is the flash mint, an evolution of the flash loan concept.

Flash loans allow users to borrow the entire liquidity pool of a protocol to use as they see fit, without posting collateral. The only limitation is that the loan must be returned in full within the same transaction, otherwise the loan will never exist in the first place.

In the DeFi community, flash loans are primarily a tool for arbitrage, as they offer an unlimited source of funds for anyone transacting entirely within the DeFi ecosystem. This includes liquidation bots, with one lucky liquidator making $4 million from scratch in November by using flash loans. Another class of flash loan users are hackers and protocol exploiters, who often use them as a source of funds for their attacks.

The flash loan’s prevalence in hacks has made the concept somewhat controversial, with some arguing that they are net negative for the ecosystem and should be removed. For others, they represent one of few meaningful DeFi innovations, which democratizes access to arbitrage.

One limitation of flash loans is that the total sum available for a transaction is limited by the liquidity locked in a particular protocol. This is where the concept of a flash mint comes into play — instead of taking funds from a liquidity pool, the mechanism mints tokens out of thin air and destroys them once no longer necessary.

The amount that can be obtained from a WETH10 mint is not really infinite, Alberto Cuesta Cañada, technical lead for Yield Protocol and developer of WETH10, told Cointelegraph:

“The only limitation to flash mints of WETH10 is that the flash minted amount can never exceed 2^112-1 at any given time.”

In decimal terms, the number quoted by Cuesta Cañada has 33 zeros, which should be enough to cover any liquidity needs in DeFi. In practice, if the user needs to unwrap the WETH for a particular use, there may be limitations due to how much ETH is stored on the WETH contract.

Most DeFi protocols actually use WETH in the backend, though they hide this from users by automatically wrapping and unwrapping it at each interaction. If they were to switch to WETH10, the flash mint could grow to its full potential.

Will projects adopt the new standard?

“The new standard will be adopted slowly, it it gets adopted,” said Cuesta Cañada. “It is not users, but applications, that might adopt WETH10, and nothing might be seen for at least a couple of months.”

Adopting WETH10 only for the risk of amplifying potential losses from coding mistakes may be a tough proposition, but the new token carries a host of other advantages. WETH10 includes the ability to make transactions free for the end user, and it skips the “approve token” mechanic to save on gas costs and avoid security threats. An additional benefit of WETH10 is that its flash mint is completely free, unlike flash loan protocols levying their own fees.

Cuesta Cañada believes that newer projects will have an easier time integrating the standard, with existing names possibly doing so in their next releases. It is yet unclear if DeFi projects believe the risks of flash mints outweigh the benefits from the new WETH standard. “No one has committed to use it yet, but we haven’t gone looking for it either,” said Cuesta Cañada. He concluded:

“If the selling proposition of WETH10 is good enough, it will be adopted. If it is not, such is life, we all learnt a lot and had a great time coding it.

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Source: https://cointelegraph.com/news/the-flash-mint-is-here-weth10-turbocharges-the-flash-loan-concept

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Blockchain

Why there’s more to Chainlink’s growth than what meets the eye

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After a collective collapse a week ago, the digital asset industry recovered somewhat, before falling once again. However, it would seem that Chainlink missed the memo in the first place. In fact, AMBCrypto had recently reported about LINK’s inability to pull-forward without the assistance of strong on-chain fundamentals.

While its long-term credentials remain golden, during the aforementioned phase of corrections, LINK’s active addresses and receiving addresses fell to monthly lows. However, recent data might be suggesting a shift, one that may just confirm once again the narrative drawn by the previous article.

Chainlink’s brief rise above $30 saw significant Address Activity

Over the past 72 hours, LINK has been on a topsy-turvy journey on the charts. While the altcoin did recover briefly to touch $30, it soon fell on the back of the rest of the crypto-market reeling too.

However, what must be noted here is that when LINK was climbing, so was its on-chain activity, an observation that backed the notion that LINK’s hikes are usually always supported by strong on-chain fundamentals.

Source: Twitter

In fact, Santiment data showed that Chainlink registered its highest single-hour level of address activity over the last seven months. Around 26,700 addresses were active during the 1-hour window, a finding indicative of high on-chain activity.

The cohesion between the altcoin’s price and active address conformed with the narrative drawn in the previous article, one that highlighted the importance of network development for LINK’s value.

In the past, certain crypto-assets such as Bitcoin SV, Bitcoin Cash, etc., have depended on their correlation with Bitcoin more than anything else, for price appreciation. On the contrary, Chainlink is re-defining its interest and mostly basing its growth on market engagement.

Citi Group suggests LINK may gain upper hand against Bitcoin

Citi Group’s recent report bestowed major props to Bitcoin, identifying its intrinsic value and interest while suggesting that the asset could become the currency of choice for international trade.

In the same report, however, Citi also drew a comparison between LINK and BTC. The concluding sections of the report highlighted that Chainlink was recently recognized by the World Economic Forum as one of the 100 most promising technologies of 2020.

Chainlink has expanded beyond expectations, gaining adoption on other blockchains such as Polkadot as well. The report added,

“It is thus already possible to envision a commerce-linked or infrastructure-linked coin that may eventually eclipse Bitcoin. Innovation in the chain-based ecosystem is continuing apace and today’s offerings may yet give way to a new invention that garners more attention and assets than Bitcoin.”

Is LINK eyeing another breakout?

Source: Trading View

On the weekly chart, Chainlink seemed to be pointing towards another price hike, especially if bullish momentum is considerable over the next few weeks. As identified by the chart, Chainlink might be on its next rally phase, similar to the one it saw towards the end of July 2020. The same can be confirmed by the higher position of the 21-day Exponential Moving Average over the 20-Moving Average on LINK’s weekly price charts.

Higher accumulation at the current range may kick off the rally, therefore, keeping an eye out for whale movement will be imperative over the next few weeks.


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Source: https://ambcrypto.com/why-theres-more-to-chainlinks-growth-than-what-meets-the-eye

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