Every uptrend witnesses periodic bouts of profit-booking as short-term traders tend to unwind positions either on adverse news or at critical technical resistance levels. This occurred with Bitcoin (BTC) today as the price momentarily dropped below $48,000 and traders scrambled to close or top up positions before being liquidated.
Elon Musk’s tweet on Feb. 20 that said Bitcoin prices “seem high” and the U.S. Treasury Secretary Janet Yellen’s warning today on Bitcoin being “extremely inefficient” could have dampened short-term sentiment.
Another possible factor that may have exacerbated the fall could have been the unwinding of excessively leveraged long positions. About $1.64 billion worth of Bitcoin futures positions were liquidated during today’s sharp pullback.
However, derivatives data for Bitcoin futures do not show any negative development, as highlighted by Cointelegraph Markets analyst Marcel Pechman.
Let’s analyze the charts of the top-10 cryptocurrencies to spot the critical levels on the upside and the key support levels on the downside.
Bitcoin broke above the resistance line of the ascending channel on Feb. 19, but could not pick up momentum. This showed that the current uptrend was tiring out. Traders aggressively booked profits today, which pulled the price down to the 20-day exponential moving average ($48,081).
However, the lower levels continue to attract buyers as seen from the long tail on the daily candlestick. If the price sustains above the midpoint of the channel, the bulls will again try to push the pair above the channel.
If they manage to do that, the BTC/USD pair could resume the uptrend. The next target on the upside is $60,974.43 and then $66,000. The upsloping moving averages and the relative strength index (RSI) in the positive territory suggest that bulls are in control.
Contrary to this assumption, if the price sustains below the midpoint of the channel, the bears will again try to break the 20-day EMA support. If they manage to do that, the pair may drop to the 50-day simple moving average ($39,885).
Ether (ETH) turned down from the resistance line of the ascending channel on Feb. 20, indicating that traders booked profits after the price reached the psychologically important level at $2,000.
The selling continued today and the ETH/USD pair dropped to the support line of the ascending channel. However, the positive sign is that the bulls purchased the dip as seen from the long tail on the day’s candlestick.
If the buyers can push and sustain the price above the 20-day EMA ($1,753), the positive momentum may remain intact.
On the contrary, if the price sustains below the 20-day EMA, the bears will try to sink the pair below the channel and the 50-day SMA ($1,465). If they succeed, the correction could deepen to $1,200 and then to $1,000.
Binance Coin (BNB) has been witnessing volatile moves in the past few days. After the sharp rally on Feb. 19, traders aggressively booked profits on Feb. 20. The bulls tried to resume the uptrend on Feb. 21, but the higher levels have again attracted profit-booking.
The bulls are currently attempting to defend the zone between the 50% Fibonacci retracement level at $233.3485 and the 61.8% retracement level at $206.1262. If they succeed, the BNB/USD pair may continue the volatile range-bound action for a few more days.
On the contrary, if the bears sink the price below $206.1262, the decline could extend to the 20-day EMA ($168). This is an important support to keep an eye on because a break below it will suggest a trend change and a likely fall to $118.
Polkadot (DOT) broke above the ascending channel on Feb. 19 and rose to a new all-time high at $42.2848 on Feb. 20. However, the long wick on the day’s candlestick showed profit-booking at higher levels.
After forming an inside day candlestick pattern on Feb. 21, the DOT/USD pair slumped back into the channel today. However, the bulls bought the dips and have pushed the price back above the channel.
The buyers will now try to push the price above $42.2848 and resume the uptrend. On the other hand, the bears will try to sink the pair back into the channel. If they succeed, the pair may drop to the 20-day EMA ($28.89).
Cardano (ADA) surged above the $0.9817712 overhead resistance on Feb. 20 and reached $1.1980811. However, the long wick on the daily candlestick showed profit-booking at higher levels.
The selling intensified today and that pulled the ADA/USD pair down to the 20-day EMA ($0.834). However, the long tail on today’s candlestick shows aggressive buying at lower levels.
If the price sustains above $1, the bulls will try to resume the up-move. A breakout of $1.1980811 could open the doors for a rally to $1.25 and then $1.50.
Conversely, if the price slips below $0.9817712, the pair may again drop to the 20-day EMA. This is an important support to watch out for because if it cracks, the correction may deepen to $0.6879684.
XRP continues to trade inside the $0.50 to $0.65 range. The altcoin bucked the trend today and rallied while most other major cryptocurrencies were witnessing sharp selling.
The price had rallied to $0.65155 today but the bulls could not sustain the higher levels. This shows the bears have not yet thrown in the towel.
However, the upsloping 20-day EMA ($0.50) and the RSI in the positive territory suggest the path of least resistance is to the upside. If the bulls can propel and sustain the price above $0.65, the rally may extend to $0.78608.
This positive view will invalidate if the price turns down from the current levels and breaks below the $0.50 support. If that happens, the XRP/USD pair may drop to $0.3855.
The bulls could not sustain Litecoin (LTC) above the $240 overhead resistance from Feb. 17 to Feb. 21. This failure to resume the uptrend could have attracted profit-booking from short-term traders, which resulted in a sharp fall today.
The LTC/USD pair broke below the 20-day EMA ($198) and the $185.5821 support today, but the long tail on the day’s candlestick shows the bulls purchased this dip. The flattening 20-day EMA and the RSI just above the midpoint, suggest a balance between supply and demand.
If the price sustains above the 20-day EMA, the bulls will again try to resume the uptrend. On the contrary, if the price again slips below the 20-day EMA, the pair may drop to the 50-day SMA ($165). A break below this support could pull the pair down to $120.
Chainlink (LINK) turned down from the resistance line of the ascending channel on Feb. 20 and formed a Doji candlestick pattern on Feb. 21. The uncertainty of the Doji candlestick was resolved to the downside today.
The LINK/USD pair plunged below the 20-day EMA ($30) and the support line of the channel today. However, the long tail on the candlestick shows aggressive buying by the bulls at lower levels.
If the bulls can sustain the price inside the channel, it will suggest that the uptrend remains intact. On the contrary, if the price again breaks below the channel, it will indicate a possible trend change.
The next critical support on the downside is the 50-day SMA ($23.82) and if this support also cracks, the decline may extend to $20.1111.
The range-bound action in Bitcoin Cash (BCH) resolved to the downside today when the price dipped below the $670 support. This breakdown showed that the equilibrium had tilted in favor of the bears.
The BCH/USD pair broke below the 20-day EMA ($610) and fell to an intraday low at $533.33 today. However, the bulls aggressively purchased the dip below the $539 support, resulting in a sharp rebound.
If the price sustains above the 20-day EMA, the bulls will again try to push the price back into the $670 to $745.39 range. If they succeed, it will suggest that the current correction could be over.
On the contrary, if the price sustains below the 20-day EMA, the pair may again drop to $539 and then to the 50-day SMA ($510).
Stellar Lumens (XLM) failed to resume its uptrend in the past few days, which showed a lack of demand at higher levels. This could have attracted profit-booking from short-term traders who may have dumped their positions today.
The XLM/USD pair broke below the 20-day EMA ($0.44) and the $0.409 support today, but the bulls purchased at lower levels. The flattish 20-day EMA and the RSI below 58 suggest the bullish momentum may be weakening.
If the bulls fail to sustain the price above the 20-day EMA, the bears will again try to sink the price below $0.409. If they manage to do that, the pair could slide to the $0.35 support.
On the other hand, if the price sustains above the 20-day EMA, the bulls will again try to resume the uptrend. A break above $0.535 will suggest an advantage to the bulls and may result in a retest of $0.600681.
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.
Market data is provided by HitBTC exchange.
Déjà vu: Ethereum’s First Month of CME Futures Overwhelmingly Bearish
Futures contracts allow institutional investors to hedge against future price movements of an asset with the possibility of shorting them. Just like with Bitcoin, the Chicago Mercantile Exchange launched its products when Ethereum was trading on its way to an all-time high.
It is unsurprising then that the first month of trading futures has been bearish as the asset’s price has retraced heavily and those shorting it on CME would have been correct to do so.
— frxresearch (@frxresearch) February 28, 2021
Déjà vu For Crypto Futures
CME launched its Ether futures on Feb. 8, and at the time the asset was trading at around $1,600. As reported by CryptoPotato at the time, a bearish reaction was expected.
Ethereum prices hit an all-time high of $2,050 on Feb. 21, but have corrected by 30% since then to today’s prices of around $1,450 – 10% lower than when the futures were launched.
ETH has underperformed BTC since the CME futures launch but a similar situation occurred with BTC, which underperformed ETH after its CME futures launch.
For #CME notes:
8 hours before CME’s first ETH 26 February 2021 expiration at 1600 UTC,
– Exchanges’ Feb futures expired at 0800 UTC
– Notable options expiry
– CME front month hit a -10% price limit, price reversed instantly and dumped at CME expiry
CME Feb closed -14.23%
— NeoButane (@NeoButane) February 26, 2021
When Bitcoin futures were first launched in December 2017, the asset hit an all-time high a week or so later then pulled back heavily resulting in a similar effect on futures markets. Exactly the same has happened with Ethereum a little over three years later.
Of course, BTC has recovered and entered a new bull market and the same will happen with Ethereum regardless of how deep this correction goes.
In terms of volumes, the CME is reporting its highest ever day as Feb. 23 with 2,092 contracts traded. That volume has slumped to around 749 contracts on Feb. 26.
Longer-term contracts are likely to be bullish as the rollout of ETH 2.0 and the growth of staking opportunities is likely to push ETH prices to new highs whilst alleviating those epic transaction cost issues.
Ethereum Price Outlook
Currently, Ethereum has gained 4% on the day but has declined almost 30% since its peak last weekend. The asset fell to a monthly low of $1,300 on Feb. 28 but has since recovered a little to trade back over $1,400 again at the time of press.
There is strong support at current levels so ETH needs to remain above it to maintain the current momentum. A fall below could see ETH settle at just over $1,200 but a sustained move higher would need to see resistance at $1,600 broken again.
Kraken Daily Market Report for February 28 2021
- Total spot trading volume at $1.82 billion, down from the 30-day average of $2.06 billion.
- Total futures notional at $594.6 million.
- The top five traded coins were, respectively, Bitcoin, Ethereum, Cardano, Tether, and Polkadot.
- Most coins had losses, but Storj ended +1.9% over USD.
|February 28, 2021
$1.82B traded across all markets today
Crypto, EUR, USD, JPY, CAD, GBP, CHF, AUD
#####################. Trading Volume by Asset. ##########################################
Trading Volume by Asset
The figures below break down the trading volume of the largest, mid-size, and smallest assets. Cryptos are in purple, fiats are in blue. For each asset, the chart contains the daily trading volume in USD, and the percentage of the total trading volume. The percentages for fiats and cryptos are treated separately, so that they both add up to 100%.
Figure 1: Largest trading assets: trading volume (measured in USD) and its percentage of the total trading volume (February 28 2021)
Figure 2: Mid-size trading assets: (measured in USD) (February 28 2021)
Figure 3: Smallest trading assets: (measured in USD) (February 28 2021)
#####################. Spread %. ##########################################
Spread percentage is the width of the bid/ask spread divided by the bid/ask midpoint. The values are generated by taking the median spread percentage over each minute, then the average of the medians over the day.
Figure 4: Average spread % by pair (February 28 2021)
#########. Returns and Volume ############################################
Returns and Volume
Figure 5: Returns of the four highest volume pairs (February 28 2021)
Figure 6: Volume of the major currencies and an average line that fits the data to a sinusoidal curve to show the daily volume highs and lows (February 28 2021)
###########. Daily Returns. #################################################
Daily Returns %
Figure 7: Returns over USD and XBT. Relative volume and return size is indicated by the size of the font. (February 28 2021)
###########. Disclaimer #################################################
The values generated in this report are from public market data distributed from Kraken WebSockets api. The total volumes and returns are calculated over the reporting day using UTC time.
Crypto Exchange Mistakenly Sold Bitcoin for $6,000: Now Requests Users To Return It
What started out as a normal trading day for some PDAX customers led to a favorable turn of fortune, or so it seemed. Their euphoria may have been short-lived by a harsh reality check as the Philippine-based exchange prepares to take legal actions.
Philippine Digital Asset Exchange (PDAX) suffered a flaw that led to bitcoin trading 88% below its actual price. The exchange reported that a surge in trading activity was the cause. At the time, bitcoin was trading north of $50k, but traders were able to scoop some for $6k.
Although PDAX halted operations to fix the glitch, it was a bit too late by then. Some users capitalized on the loophole and withdrew bitcoins out of the exchange.
To avert the massive loss, PDAX has asked traders to return its bitcoin or risk facing legal proceedings. Many users claim to have received messages to this effect.
It remains unclear how the legal proceedings will play for PDAX, with users rightly pointing out that traders’ actions are within the agreed terms and conditions.
A #Cryptocurrency exchange glitch at PDAX in Southeast Asia allowed crypto traders to buy Bitcoin for $6,100 & were able to withdraw the discounted BTC. They may face legal action unless they return it. But PDAX’s terms and conditions say orders are “final and irreversible.”
— Luke D. (@lukedalu) February 25, 2021
Bitcoin Whale Responsible For Glitch?
Large volume transactions have become the order of the day as bitcoin whales step up activity. Their mass transactions often indicate strong bullish signals unless they get hooked while at it.
Reports surfacing on social media led to strong suggestions that the entire fiasco occurred due to an error by a bitcoin whale. who allegedly sold 316,000 BTC for PHP 300k (about $6100) instead of the actual price of PHP 2.3 million ($47,000). This prompted PDAX to cease trading activity and temporarily shut out users.
Users Outraged By Inability To Access Accounts
PDAX’s attempt to control the situation turned out to be counterproductive as it sparked outrage from many users on social media. The downtime, which lasted for 36 hours, left customers furious as they could not access their accounts.
They expressed frustration due to missed trading opportunities and accrued losses from not being able to close positions.
Dear Pdax, until now accounts cannot be accessed. Multiple promised broken. Aside from the bitcoin issue, our money is trapped in your platform. @ANCALERTS @pdaxph @BangkoSentral https://t.co/b5aJemxDIS
— Caldero y Realonda vda de Dolomite (@mikel_pangan) February 22, 2021
PDAX Clears The Air
PDAX eventually released a comprehensive report addressing the issue. It claimed that an “isolated unfunded order” infiltrated its system and affected the account of its users. It explained further that it had tracked and rectified the glitch and was in the process of fully restoring users’ accounts.
Speaking in a press conference, PDAX CEO Nichel Gaba said:
“It’s very understandable that a lot of users will feel upset they were able to buy what they thought an order was there for Bitcoin at very low prices. But unfortunately, the underlying Bitcoins were never in the possession of the exchange, so there’s never really anything there to be bought or sold, unfortunately.”
The BSP-licensed exchanged assured users that it will continue addressing their concerns and rendering support where necessary.
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