Polkadot bulls are nurturing a potential breakout after spiking above a short term triangle pattern. DOT/USD drastic price action is delayed by the resistance at the 50 SMA. Polkadot broke down from the ascending channel, discussed last week. Luckily, support at $4.00 came in handy, preventing acute declines from taking over. A reversal, therefore, ensued
Polkadot broke down from the ascending channel, discussed last week. Luckily, support at $4.00 came in handy, preventing acute declines from taking over. A reversal, therefore, ensued with buyers increasing their entries. A break above both the 50 Simple Moving Average (SMA) and the 100 SMA in the 1-hour chart encouraged the bulls to increase their entries in anticipation of a rally towards $5.00. At the time of writing, DOT/USD is dancing at $4.80 amid a struggle to overcome the short term resistance at $5.00.
The 4-hour chart, prints a bullish picture for DOT/USD, especially after a breakout above a falling triangle pattern. Triangle patterns are some of the most common technical analysis tools. They help the traders predict a change from the prevailing trend and the extent to which the new trend can reach. In this case, the triangle breakout is likely to catapult DOT above $5.00.
Subsequently, a break above the resistance at the 50 SMA would boost the price farther north. According to the Relative Strength Index (RSI), the uptrend is strong enough for a break above $5.00 in the near term. It t seems lack of enough volume is holding Dot from making a drastic spike. In other words, many are not believing that Polkadot is set for that significant move. This is most likely to invalidate the buy signal. Therefore, is it essential to hold on for a confirmed breakout, especially past the 50 SMA, before going all-in on DOT.
Spot rate: $4.77
Relative change: 0.0682
Percentage change: 1.50
Trend: Short tern bullish bias
Volatility: Expanding
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Popular venture capitalist and Bitcoin bull Timothy “Tim” Draper predicted that major online streaming platform Netflix could be the next company to join the bitcoin buying bandwagon.
Speaking in a recent episode of the Unstoppable Podcast, Tim Draper stated that Netflix could be the next in line to add bitcoin to its balance sheet. According to him, the company’s co-founder and co-CEO, Reed Hastings, makes Netflix a likely bitcoin investor. Draper buttressed his point, saying:
“I think Reed Hastings is a very innovative guy and has a lot of creative thinking and I think he still controls the reins at Netflix. And so I think that might be the next big one to fall.”
Meanwhile, the venture capitalist mentioned social media giant Facebook, as well as other major companies like Apple, and Google, as likely candidates to invest in bitcoin. However, Draper noted that the companies were instead trying to create a centralized currency of their own.
Draper also stated that if he was the chief financial officer (CFO) of any major organization, he would advise the company to allocate a portion of their portfolio to bitcoin. According to the BTC proponent, bitcoin served as a hedge against inflation.
Since Tesla’s billion-dollar bitcoin investment, there have been speculations about which company would emulate Tesla’s move. Increased institutional interest in bitcoin is largely responsible for BTC’s bullish momentum. Meanwhile, Firms like Microstrategy and Square recently added to their bitcoin holdings.
Apart from pitching Netflix as the next possible bitcoin investor, the venture capitalist stated that the retail giant Amazon could start accepting bitcoin. Adding that, people could use the flagship cryptocurrency to purchase products on Amazon.
Back in February, there were reports that Amazon was looking to introduce a new project that would enable customers to convert cash into digital currency. While the project would launch in Mexico, the company did not state what digital assets it would support, although there were speculations that the company may not use popular crypto-assets like BTC or ether.
While also speaking on bitcoin’s price target, Draper said:
“The current currency holdings around the world in dollars is about $100 trillion and bitcoin’s market cap is just reaching a trillion now. So there’s no reason it can’t go up a 100 fold. It’s not like it is going to completely replace the dollar. Although I think people are going to laugh when they are trying to buy things with dollars in the future.”
The venture capitalist made a prediction earlier in 2020 that the price of bitcoin would reach $250,000 by the end of 2022 or early in 2023.
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In October last year, Ripple co-founder Chris Larsen said that the firm may consider relocating to other countries citing the lack of regulatory clarity in the United States. Since then, many have speculated where the firm’s new headquarters will be located. However, amid a lawsuit with SEC regarding an alleged illegal securities offering, and XRP’s dwindling price, Larsen made a new announcement recently that stated that the firm was here to stay.
Speaking to The San Francisco Chronicle, co-founder said that Ripple’s global headquarter will remain in San Francisco. He added:
We’re committed to the city. It’s got the most diversity, creativity…it’s got the critical mass.
Earlier, CEO of Ripple, Brad Garlinghouse, hinted at a possibility that Ripple could move out of the US, given its “lack” of a regulatory framework. He stressed that the country was “out of sync” and needed to implement a clear regulatory framework regarding crypto.
At the time, the CEO said that he was considering whether Ripple would benefit from relocating to a country where regulations were more clear. He admitted to being impressed by how the UK and other G20 nations including Singapore, Japan, and the UAE had “clear regulatory frameworks” that allowed for “healthy markets to develop.”
Meanwhile, another leading crypto firm in the neighborhood has decided to do away with its headquarters altogether. Coinbase CEO Brian Armstrong said that amid the firm’s work from home policies they choose not to have a base in San Francisco, but will continue to keep their offices open. Stating that the company is “decentralized” the CEO added:
As we’ve moved to a remote first environment, we realized that we no longer have a headquarters located in any one city.
Source: https://ambcrypto.com/ripple-is-committed-to-san-francisco-says-co-founder-chris-larsen
On Feb. 20, Ether (ETH) price rallied to a new high at $2,015 and this caused multiple indicators to display signs of excessive optimism. While the excitement could be easily justified by Ether’s year-to-date 176% gain, these warning signs should not be ignored.
On of the primary driving factors of the current bullish sentiment is the launch of CME ETH futures and Grayscale Investments ETH Trust reaching $6.3 billion assets under management. The DeFi phenomenon also continues as there is currently more than $21 billion worth of Ether locked in DeFi.
Currently, the Crypto Fear & Greed Index is at 93, indicating “Extreme Greed” according to its methodology. Many traders use the metric as a counter trading signal, meaning, the extreme fear level can be a sign that investors are bullish and a buying opportunity is present. In contrast, when investors are getting too greedy, it could be a sign that the market is due for a correction.
Unlike the excessively leveraged retail traders, the more experienced market makers and whales hs been skeptical of the never-ending rally in Ether. Regardless of the rationale for the price peak, the 36% price correction that followed was accelerated by large liquidations.
The liquidation of $2 billion in long futures contracts from Feb. 19 to Feb. 23 represented 28% of the total open interest. Thus, one should expect significant deterioration in market sentiment, as depicted on the previous Fear & Greed indicator.
Surprisingly, none of that happened on the Ether derivatives markets, as both futures contracts premium (contango) and the options skew remained bullish.
By measuring the expense gap between futures and the regular spot market, a trader can gauge the level of bullishness in the market.
The 3-month futures should usually trade with a 10% or higher premium versus regular spot exchanges. Whenever this indicator fades or turns negative, this is an alarming red flag. This situation is known as backwardation and indicates that the market is turning bearish.
The above chart shows that the indicator peaked at 39% on Feb. 20 as Ether touched its all-time high. Nevertheless, it has kept above 16% during the entire correction down to $1,300. This data shows that professional traders remained confident in Ether’s price potential.
When analyzing options, the 25% delta skew is the single-most relevant gauge. This indicator compares similar call (buy) and put (sell) options side-by-side.
It will turn negative when the put options premium is higher than similar-risk call options. A negative skew translates to a higher cost of downside protection and indicating bullishness.
The opposite holds when market makers are bearish, causing the 25% delta skew indicator to gain positive ground.
Over the past month, there hasn’t been a single incident of a sustainable positive delta skew. Therefore, there is no evidence that option traders demanded more significant premiums for downside protection.
This data is very encouraging, considering that Ethereum faced a heavy sell-off but the futures and options metrics discussed above held bullish levels during the downturn.
As Ether managed to recover quickly from its recent $1,300 dip, investors gained further confidence that the uptrend had not been broken.
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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