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Bitcoin Flips Bullish — But Here’s Why BTC Price May Still Hit $3.9K

Bitcoin (BTC) price has gained more than 10% in the last week, giving bulls some hope that the road ahead is a bright one for the leading digital asset.

However, despite an effort to blast through the critical resistance level of $7,200 as mentioned in last week’s analysis, there was a huge rejection bringing home the reality that perhaps it may be a little too soon to be expecting a miraculous bounce back to the $8,000+ levels. 

Daily crypto market performance

Daily crypto market performance. Source: Coin360.com

$5,500 then moon?

BTC USD daily chart

BTC USD daily chart. Source: TradingView

I think it’s safe to assume that Bitcoin has settled back into the descending channel that formed in the second half of 2019. As Bitcoin has now not only bounced off support on the daily, leaving nothing but a wick, but it has now done exactly the same with the resistance. 

To me, this validates the channel even more so than before, as the price is currently following a path marked I marked out in yellow, on a video I published to YouTube on March 31. This was one of three scenarios I was waiting on, and the one I felt that was most likely.

As such, since Bitcoin cannot seem to break out above $7,200, it seems probable that bears might be about to regain control ahead of the much-anticipated halving event, and this puts $5,500 as the critical price to hold before cheap corn is back on the menu. 

However, many key indicators are contradicting this sentiment. 

Is momentum returning? 

BTC USD weekly MACD chart

BTC USD weekly MACD chart Source: TradingView

During sideways market periods, it is easy to get chopped up and spat out when working off lower time frames, and often a glance at a higher time frame can help validate your bias. However, one such indicator that isn’t good for bears right now is the weekly moving average divergence convergence (MACD) indicator, as this is now mooing to the herd. 

As can be seen from the chart, the MACD is already starting to pinch towards the signal line. Since we have had a relatively bullish week, we should see this move in even more so when the weekly candle closes, bringing us closer to a bullish cross, which typically results in a sustained uptrend, which almost always lasts over a month if not several.

However, right now, there are bigger things happening in the world that may invalidate this as a possibility, and my concern is that we will begin to see a significant reduction in retail buying power due to the rise in unemployment resulting from the coronavirus lockdowns. 

While the worldwide quarantine is in the early stages — with many believing it will only last a couple of weeks — you only need to look at China to see that this will last a lot longer, so who exactly would be buying? 

The answer may lie in the Relative Strength Index, which could be enticing smart money into crypto.

RSI hinting at a bounce 

BTC USD weekly RSI chart

BTC USD weekly RSI chart Source: TradingView

The last time Bitcoin approached oversold territory on the weekly, it experienced a 300% price increase within six months as can be seen on the Relative Strength Index (RSI) indicator. This is based on the Dec. 10, 2018, pivot from 29.07 on the RSI scale. 

However, Bitcoin had already experienced a bounce on the RSI on March 9, 2020, when it was 33.37 on the RSI scale, and even with the colossal dump on March 12, the RSI is still trending upwards. This brings to light two pertinent questions:

  1. Will Bitcoin see another 300% price rise within a similar timeline after the last oversold pivot?
  2. Was the price purposely pushed down after March 9 to load up on cheap BTC for a high probability of 3x? 

But perhaps another clue as to what can be expected from Bitcoin over the coming weeks can be found in the mining difficulty charts? 

Mining difficulty drop is slowing 

BTC mining difficulty

BTC mining difficulty. Source: BTC.com 

The Bitcoin mining difficulty dropped by a monstrous -15.95% — the biggest since 2011 — on March 26, an adjustment that helped ease miners’ concerns surrounding profitability. This time last week, it looked as if the mining difficulty would drop by a further -14%. 

However, as the week has progressed the adjustment estimate has dropped to just -2.2% and with three days left to go, this could end up closing as a positive adjustment.

You only have to look at the impact the positive adjustments had on the price of Bitcoin this year to see what this could be yet another bullish indicator.

Bullish scenario 

All the indicators are bullish, so why does it feel bearish? Right now we are at the top of a valid channel, as such a breakout could well be imminent. For this to happen Bitcoin would need to flip $7K resistance into support and from here $8,200 looks like the next level of resistance we would encounter. 

Bearish scenario

The price of Bitcoin has already doubled since its recent bottom, as such a pullback to $5,500 over the next week would be completely reasonable to expect. 

If this level fails to hold, then it opens up $3,900 as a possibility. If bulls don’t step in then, I’d be very surprised.

The views and opinions expressed here are solely those of @officiallykeith 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.

Bitcoin Price Now in a ‘Key Spot’ to Conquer $6.9K Before Weekly Close

As the weekend began Bitcoin (BTC) price traded in a relatively tight range after making a second attempt at $7,000 on April 4. The digital asset surged to $6,988 before pulling back to the $6,800 range for the remainder of the day. 

As Bitcoin spent Saturday trading sideways, the majority of the top-ten altcoins posted marginal gains. Ether (ETH) gained 1.57%, Litecoin (LTC) added 1.02%, and Binance Coin (BNB) managed to gain 2.31%. 

Crypto market daily price chart

Crypto market daily price chart. Source: Coin360

At the time of writing, the price continues to hold above the ascending trendline and the price is slowly pushing close to the $6,900 resistance, a level which has been broken above three times this week. 

BTC USDT daily chart

BTC USDT daily chart. Source: TradingView

The $6,900-$7,200 range is proving to be a tough resistance area to overcome but with the weekly close approaching, investors will be watching to see if Bitcoin price makes a sharp move above $7,200 or a pullback to $5,800. 

BTC USDT 4-hour chart

BTC USDT 4-hour chart. Source: TradingView

In the 4-hour timeframe, traders will notice that trading volume is declining as the Bollinger Band arms are narrowing. The price continues to rise toward the upper Bollinger Band arm which is currently situated at $6,997. 

Narrowing bands and declining trading volumes typically occur before a breakout or breakdown takes place. 

Bullish scenario

A bullish outcome would involve a high volume surge which pushed the price through the highlighted resistance zone to the high volume VPVR node at $7,200. Clearing $7,200 would open the door for the Bitcoin price to rise to $8,000 where another high volume VPVR node exists, along with the 100 and 200-day moving average at $8,143 and $8,133. 

Earlier in the week, Cointelegraph contributor filbfilb expects that: 

“Any break to the upside is likely to be ultimately resisted around the $8K level due to the confluence of technical resistance and known institutional short-selling interest.” 

While the $8,000 to $8,500 level is bound to be a challenge to overcome, filbfilb adds that: 

“Bitcoin is critically showing a clear lack of selling interest below the 200-week moving average and buyers appear to be stepping in at these levels, which is clearly bullish.”

Bearish scenario 

If Bitcoin continues to reject $6,900 and $7,100 resistance, the price could eventually drop below the $6,800 to $6,600 support zone to revisit $6,350 and below this $5,850 and $5,450. 

At the moment the likelihood of a drop below $6,000 seems unlikely as the 4-hour chart and filbfilb’s observation show that bulls have defended the $6,600 support over the past week. 

BTC USD 4-hour chart

BTC USD 4-hour chart. Source: TradingView

On April 4, Crypto trader Scott Melker made a similar observation, tweeting the above chart and saying: 

“Key spot. If you are a bull, you can buy support here, or wait for a break above 7K and buy the retest. Green circles. If you are a bear, you can wait for support to break and then sell or short the retest as resistance. Red circle.”

According to Melker, a strong push above the $6,900 resistance could see Bitcoin price rally to $7,500 before pulling back to retest the $7,000 support before making an attack on the resistance at $7,750. 

Alternatively, a bearish outcome would see the price drop below the ascending trendline to the $6,200 support before attempting to recover above the overhead trendline, which may now function as resistance. 

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.

Bitcoin Price Struggling to Break $7K — Here’s the Worst-Case Scenario

The price of Bitcoin (BTC) has seen a relatively stable week, as BTC/USD has been hovering between $6,000 and $7,300.

However, due to the low volatility, the volume also diminished, which is a sign of a big move in the works. What can be expected of the markets while the coronavirus pandemic is taking a toll on the global economy?

Crypto market daily performance. Source: Coin360

Crypto market daily performance. Source: Coin360

Bitcoin hovering against crucial resistance for bullish momentum

The price of Bitcoin is hovering against the crucial resistance for bullish momentum. A clean break above the resistance of $6,900-7,100 would indicate bullish momentum, which opens the door to $8K.

BTC USD 1-day chart. Source: TradingView

BTC USD 1-day chart. Source: TradingView

The reasoning behind this thought is quite clear. Bitcoin has seen a massive retracement in the past few weeks, after which the price slowly started to move up, as it’s up almost 100% since the recent low of $3,750.

However, no level has been claimed for support again, which is a crucial ingredient in becoming bullish. The price of Bitcoin needs to claim old support levels to flip levels from resistance to support and to generate a further optimistic outlook for the market.

Price of Bitcoin also fighting 100-Week MA

BLX 1-week chart. Source: TradingView

BLX 1-week chart. Source: TradingView

The higher time frame charts are the charts to watch at this point, as they provide massive support and resistance levels.

The weekly chart is one of those charts, as the 100, 200 and 300-moving averages show significant support and resistance levels.

Currently, the price of Bitcoin bounced from the 300-Week MA, closed above the 200-Week MA, and rejected at the 100-Week MA. The latter, the 100-Week MA, is a crucial factor to watch for if the market wants to turn bull.

An apparent breakthrough of the $6,900 level (as that’s the level around the 100-Week MA) would mean that the market regains this moving average as support. A conclusion can be drawn that a bull market has started if that moving average can become support.

However, losing the 200-Week MA (which is around $5,400), would generally lead to a further drop to the $4,000 area, which is around the 300-Week MA. Such a drop would inevitably result in a period of accumulation as witnessed in previous cycles.

An accumulation and sideways period wouldn’t be strange in the current economic climate surrounding the coronavirus. However, if Bitcoin can reclaim the 100-Week MA and turn bullish, then that would be a major bull market signal.

Total market capitalization also fighting crucial resistance

Total market capitalization cryptocurrency 1-week chart. Source: TradingView

Total market capitalization cryptocurrency 1-week chart. Source: TradingView

The total market capitalization of cryptocurrencies is showing a clear view. A break and a close above the $185-190 billion resistance level would suggest a bull market and put the $240 and $300 billion resistance levels in sight.

However, if the market goes into the red next week, a further downwards test could also occur in the total market capitalization chart.

The levels to watch for are the $130 and $105-115 billion regions. As discussed previously in the article, the 300-Week MA could serve as major support.

This moving average is lying around $117 billion as we speak, confluent with the support levels lying beneath the markets. If the market decides to fall further, this level is the primary area to look for.

The bullish scenario for Bitcoin

BTC USD 6-hour bullish chart. Source: TradingView

BTC USD 6-hour bullish chart. Source: TradingView

The bullish scenario for Bitcoin is now pretty straightforward. The chart is showing a clear downwards pointing trendline, which needs to be broken to the upside for a bullish outlook.

Therefore, Bitcoin has to remain above $6,300-6,400 for support as the first step, after which the next massive step would be to generate a breakout to the upside.

The moment that Bitcoin decides to break through the $6,900-7,100 resistance level, a green $700-1,000 candle may be expected, as it’s pretty much open-air until the major next resistance level at $7,800-8,000.

The final step for a massively bullish outlook would be to flip the $6,900-7,100 for support. If that happens, further upwards momentum can be expected with targets at $8,500, $9,300 and $10,400 after that.

For now, a breakout above the current resistance level would be a great signal.

The bearish scenario for Bitcoin

BTC USD 6-hour bearish chart. Source: TradingView

BTC USD 6-hour bearish chart. Source: TradingView

The bearish outlook is still likely given the current economic instabilities and Bitcoin price trend, which can be said is in a rising wedge within a general downtrend.

Given that the volume is decreasing in the recent movements, a big move is to be expected from the markets. Combining everything alongside the resistances, a downwards move is the most likely to occur.

Therefore, if the price of Bitcoin can’t break above $6,900-7,100 (red zone), a drop towards $5,600-5,800 is to be expected. The movements to watch for traders then are the support/resistance flips in continuation.

If the price of Bitcoin drops to $5,600 and the bounce gets rejected instantly at $6,300, then further downward momentum should be expected.

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.

Coronavirus & Bitcoin Price: Is China Losing Its BTC Mining Monopoly?

This week the price of Bitcoin (BTC) surged more than 15%, reaching a high at $7,200 before pulling back into the $6,800 range. Despite the recovery, Bitcoin still has a way to go in order to reach the $8,000 level seen before the coronavirus-triggered selloff on March 12.

Cryptocurrency market performance

Cryptocurrency market performance. Source: Coin360

The drop had several consequences on the Bitcoin network. Having reached the $3,800 price range, the accentuated drop forced some Bitcoin miners to throw in the towel and shut down their operations due to mining becoming unprofitable.

As miners have hosting and electricity fees to keep up with, often relying on the short-term yields of their equipment, the price led to the biggest difficulty drop since 2011. However, it seems like the coronavirus and the steep drop in the value of Bitcoin may have affected some regions more than others.

Chinese miners go dark

As was recently reported by the Chinese publication Securities Daily, more than 40 established mining operations have been forced to shut down as a large number of Antminer S9s, an older generation of Bitmain’s popular Antminer products, have become unprofitable. An industry insider told the publication that “roughly 2.3 million Antminer S9s have been shut down since March 10,” according to data from F2pool.

This drop in the price of BTC seems to have affected Chinese miners the most due to the amount of S9s and old-generation equipment that have become unprofitable to keep using. Electricity prices for miners in China range from $0.03 to $0.05 per kilowatt-hour. Even for miners with electricity at median rates of $0.04 per kWh, miners need Bitcoin to be at $5,136 to be profitable. 

Matt D’Souza, the CEO of Blockware Solutions, told Cointelegraph:

“The drop was several old generation rigs going unprofitable. If you monitor the pools. Many of the Asian pools lost hash, not the American pools. That signals it were machines in the East that shut down, not North America. It was old gen equipment out East. It was ultimately the price of Bitcoin dropping and machines becoming unprofitable and forced to shut off.”

Impact of coronavirus on China-based miners

Not only has coronavirus affected miners indirectly through its effect on the price of Bitcoin — and just about every other asset class — the pandemic has also affected the area more broadly and made machines harder to come by as supply chains have been disrupted. D’Souza explained:

“I think COVID has influenced hash rate drop because it has disrupted global supply chains. So miners are not getting rigs quick enough. The difficulty adjustment was much greater because next-gen rigs have been delayed due to COVID-19.”

The pandemic has also had a considerable effect on the secondhand market for mining equipment, which has always been a well-known subset of the mining industry. Wu Tong, the deputy director of the Blockchain Commission within China’s Ministry of Commerce, has already observed this first hand. He recently told Securities Daily:

“Under the influence of the epidemic, the difficulty of maintaining, renewing and continuing production of mining machines has further increased, and the 12.04 price plunge has put many mining machines on sale. The tide of mining machine selling has already occurred, and the average selling price of each mining machine is 30%–50% lower than before the Spring Festival.”

Why miners may move away from China

China has been the market leader when it comes to mining for a long time, with studies showing it collectively controls a majority of the Bitcoin hash rate. China’s dominance is owed mainly to the country’s low electricity prices and leading manufacturers, such as Bitmain and Ebang. 

These conditions not only allow more advanced Bitcoin mining operations to access new generation equipment quickly and cheaply but also for smaller operations to make use of old equipment for longer and acquire it at lower prices. 

However, as Bitcoin continues to mature and gain interest among investors, other countries may have a different set of characteristics that make it more viable for mining. 

Pros and cons of mining in the East

Countries like Venezuela that have even cheaper electricity and other subsidized energy sources often end up receiving old mining equipment like the aforementioned Antminer S9. But the price is not the only factor, as internet speeds also give countries like the United States an edge. 

Higher purchasing power and the ability to raise capital may allow new miners in Western countries to access new-generation machines and to stay ahead of the curve. This is the case with Blockware Mining, which has kept its 180 petahash per second mining operation up and going despite higher electricity prices in the U.S.

Moreover, the Chinese government has not shied away from its dislike of cryptocurrency and Bitcoin mining. The country has a track record of cracking down extensively on exchanges and many illegal mining operations. The U.S., on the other hand, has been ahead of the curve when it comes to regulating the cryptocurrency industry, which may prove to be a decisive factor in the future. 

It has certainly proven to be so for companies like Bitmain and Ebang, which have submitted listing applications to the Hong Kong Stock Exchange but have not heard back.

A pivotal moment for mining

Overall, it’s possible that we may see a shift in the mining industry, especially with moments like the halving and the ongoing pandemic.

The hypothetical decentralization of the industry would be welcome, as many have expressed concerns when it comes to the centralization of Bitcoin mining. But for now, China continues to take the lead.

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.

Bitcoin Bulls Can Take BTC Price to $8K Amid Report $10 Oil Inevitable

Bitcoin (BTC) was pushing to flip $7,000 resistance to support on April 3 amid warnings that oil markets really will hit $10 a barrel this month.

Cryptocurrency market daily overview. Source: Coin360

Cryptocurrency market daily overview. Source: Coin360

Media: $10 oil could last the whole Q2

Data from Coin360 and Cointelegraph Markets tracked multiple attempts by Bitcoin bulls to push the market definitively over the $7,000 mark on Thursday and Friday.

At press time, all those attempts had failed to deliver support, with BTC/USD in each case falling back to the high $6,000 range.

Bitcoin 1-day price chart. Source: Coin360

Bitcoin 1-day price chart. Source: Coin360

Bitcoin surged higher earlier on Thursday, as anticipation built around an end to the ongoing oil price war which, according to United States President Donald Trump, could send the price of a barrel to just $9.

Fresh comments by Trump about an agreement sent oil markets spinning, with Brent crude gaining 30% in hours before comments by Russia contradicted the buoyant tone.

Speaking to CNBC, Victor Shum, vice president of energy consulting at insight provider IHS Markit, warned that $10 oil remained a firm possibility for April.

“We are projecting that Brent is going to drop to around $10 a barrel in April and will likely stay at that level in the second quarter,” he told the publication.

“There is little chance of any OPEC+ deal that’s going to save the crude oil market from the attack of the COVID-19. I think any talk of big cuts is probably too little, too late.”

Filbfilb: Bitcoin bulls are strong

For Bitcoin, meanwhile, previously cautious traders were now delivering increasingly upbeat forecasts for the short term.

In an announcement to subscribers of his Telegram trading channel, Cointelegraph Markets analyst filbfilb eyed a possible run to $8,000 as the next step.

“The bulls seemingly are strong here,” he summarized.

“Assuming the day closes something like it is now I favor the bulls to squeeze us up to ~8k.”

At $6,900, BTC/USD is just $300 below its position at the start of 2020, meaning Bitcoin has limited its year-to-date losses to just 4.3%.

Keep track of top crypto markets in real time here

Bitcoin Price Holds $6.8K Defying Predictions of Testing New Lows

On Thursday, April 2, Bitcoin (BTC) price continued the rally it started in the late evening on Wednesday. 

As reported earlier by Cointelegraph, Bitcoin price briefly consolidated around $6,650 before breaking out to tackle the $6,900 resistance and as predicted in a previous analysis, the price quickly rose to $7,200 before pulling back sharply. 

Crypto market daily price chart

Crypto market daily price chart. Source: Coin360

Analysts are calling for a retest of lower support at $5,800-$5,800 but at the moment traders continue to buy into dips and this is resulting in the price holding $6,800. Given that the price has lately taken to bouncing off the ascending trendline a retest of underlying support at $6,600 and $6,330 seems more likely. 

BTC USDT 4-hour chart

BTC USDT 4-hour chart. Source: TradingView

The volume profile visible range (VPVR) shows a volume gap from $6,540-$6,370 so if Bitcoin fails to hold the $6,600 support the former support at $6,400 is less likely to hold. A surge in sell volume would likely lead to the price slicing through this zone and possibly through the high volume node at $6,330, hence the call by analysts for the price to revisit to the support at $5,800.  

Since pushing right to the top of the resistance cluster at $7,200 the price has notched lower highs on the 4-hour timeframe but the sell volume that quickly pulled the price from $7,200 has ebbed away and as the price pulls closer to $6,700 there is an increase in the money flow shown by the Chaikin Money Flow oscillator. 

The CMF is above 0 and the increase, along with the long shadows and higher lows of the last 3 candlesticks on the 4-hour timeframe show bulls are buying on the dips to support the price above $6,600. The decline in selling volume also supports this observation. 

BTC USDT 4-hour chart

BTC USDT 4-hour chart. Source: TradingView

The price is above 20-MA of the Bollinger Band indicator at $6,600, a point also aligned with the ascending trendline, and at the time of writing the 4-hour Relative Strength Index is at 66. 

Thus, traders can watch to see if the downward curve flattens or begins to pull up along with an increase in purchasing volume on the shorter timeframes. If this doesn’t happen then a retest of the aforementioned underlying supports seems likely. 

Looking forward

Ultimately, the Wednesday and Thursday rallies did well to bolster Bitcoin’s momentum,  allowing the cryptocurrency to push through key overhead resistances and turn a few to support. 

BTC USDT daily chart

BTC USDT daily chart. Source: TradingView

On the daily time frame one can see that the price continues to form higher lows and even with a retest of underlying supports as low as $5,800, the price is gearing up for a retest of the $7,200 resistance where there is a high volume VPVR node. 

Once the price pushes through the $7,200-$7,400 zone there is a volume gap, which if exploited, would see the price rise to $7,700. While this level is close to setting a monthly higher high above $7,950, the 50,100, and 200-day moving averages are all close overhead and will likely be a challenge to overcome. 

While it could take longer than one expects, a move above the 100 and 200 day moving averages would signal that Bitcoin has turned bullish on a macro level and sustained trading above $8,500 would provide even stronger confirmation.

For the short-term, traders can simply watch to see if the price holds above the ascending trendline and whether dips continue to be brought up as this is a sign of strength. 

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.

Bitcoin Price Soars 15% to $7.2K But Breaking $8K Won’t Be Easy

Bitcoin (BTC) is trading at $7,106 representing an impressive 14.7% gain in the last 24 hours and 6.8% for today. Other global markets are also up off the back of President Trump’s comments around the likelihood that crude oil production will be cut back, which is one of the triggers which caused Bitcoin to slide from $9K to $8K in early March.

Looking at performance relative to its peers, Ether (ETH) and XRP both continue to underperform versus Bitcoin as was the case last week. Bitcoin dominance remains at 66%. 

Cryptocurrency market 24-hour view

Cryptocurrency market 24-hour view. Source: Coin360

1-month Bitcoin price chart 

BTCUSD 1-month chart

BTCUSD 1-month chart. Source: Tradingview

Bitcoin closed the month of March with a bearish candle close below the previous support at the 20-month moving average, which represented the first close below $6,500 in 11 months. Volume during March saw Bitcoin print the second-highest monthly volume candle of all time at Coinbase, with only December 2017 taking the prize for the highest volume.   

Overall volume has printed increasing selling climatic pressure over the last 18 months, but there has been a large rejection seen above the VPVR point of control that shows the price at which most volume has been traded (yellow horizontal line). 

The next highest volume node is where the bulls and bears are now battling it out. In the past, Bitcoin has never spent a long period of time between the price of $4,000 and $6,500. So despite the bearish close, the total rejection of trading below $4,000 is encouraging for the bulls who neutralized the memorable deleveraging event very quickly. 

The Relative Strength Index is trending at 49, which is neutral and fairly representative of where the price currently is. 

1-week Bitcoin chart 

BTCUSD 1-week chart

BTCUSD 1-week chart. Source: Tradingview

The weekly Bitcoin chart shows that the price currently trading up against previous support, now turned resistance at around $6,800. There is also a diagonal resistance that forms the top of a channel from which Bitcoin broke out earlier this year but ultimately dates back to July 2019. 

The 200-week moving average defines support with very little price action occurring below it for any amount of time, indicating demand and lack of supply. The 20-week and 100-week averages are likely to be a formidable resistance point for Bitcoin as they have historically been very important support and resistance areas that dictate the bullish or bearish nature of the market.

The year to date Volume Weighted Average Price (VWAP), which is the average price for the year, weighted for volume lies at $7,100 (as is the 100 WMA). This implies that there will be an inflection point which normally acts as a magnet for the price where most business has taken place.   

Overall the 200 (at $ 5,588) and 100 (at $ 7,095) week moving averages are dictating local support and resistance, the latter of which is currently under assault by the bulls.

Bullish buying volume has persisted for the last three weeks but is diminishing as the price is rising. This is generally considered to be leaning bearish in an uptrend where the bulls are losing momentum, although it should be noted that the recent volume has been unusually high. 

The Chaikin Money Flow oscillator, which looks at the amount of Money Flow Volume over the last 20 weeks, shows that there is a bullish divergence within the volume, which is indicative of relative buying pressure. 

4-hour chart

BTCUSD 4-hour chart

BTCUSD 4-hour chart. Source: Tradingview

The 4-hour Bitcoin price chart shows a series of higher lows for BTC/USD and helps to illustrate the demand at the 200-week moving average and below, both of which are being front-run. There is also a failed head and shoulders top, which was another indication that the bulls are in control of the narrowing price range. 

The CMF has turned positive, which is a good short term signal for the bulls. But it is overall relatively neutral, which is indicative of the volume decline. The Stoch RSI is indicating that Bitcoin is overbought on lower time frames. 

CME & futures data

CME Futures 1-week chart

CME Futures 1-week chart. Source: Tradingview

The CME produces a Commitment of Traders report issued on Friday, which aggregates net trading positions of differently sized traders to identify the overall directional position of each category. 

The large-sized traders or institutional traders are illustrated by the red line on the chart above and it’s easy to see that they are nearly always short Bitcoin, but doubled down on their short positions in 2020 between $8,200 and $10,700. The chart shows that they only closed these out in the latter fall from $8,000 to $4,000.

The reason this is important is that we know that a lot of the CME buying pressure was from the closure of the large-sized short positions. The retail and professional traders contributed to the selloff as should be expected, while the institutions profited by closing short positions into the supply generated from the decline. 

We can, therefore, assume that institutions will be interested in shorting the same range as previously, from $8,200 upwards. This is also in confluence with the weekly moving averages that are likely to cause resistance and also the yearly pivot that lies at this price. 

As such, the CME data may be useful to monitor the behavior of large-sized traders if Bitcoin can reach out for $8,000. 

Also shown on the chart is the Bitmex funding rate, which has historically had an inverse relationship with price direction when either particularly high or negative. This is showing that it has now flipped marginally positive again, which indicates a bullish shift in the market. In other words, sentiment had turned (at resistance!), which may be an opportunity for the bears.

Looking forward

Bitcoin is critically showing a clear lack of selling interest below the 200-week moving average and buyers appear to be stepping in at these levels, which is clearly bullish. 

Any break to the upside is likely to be ultimately resisted around the $8K level due to the confluence of technical resistance and known institutional short-selling interest. 

The first real sign of bullishness would be to start to reclaim each of the weekly moving averages and start turning them into support, with the $7,100 level at the 100-week moving average being the first objective. Should there be another downturn, the 200-week moving average will be the first line of defense.  

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.

Decoupling? Bitcoin Price Surges Above $6.7K as Stocks Again Bearish

Since topping out at $6,500 on March 31, Bitcoin (BTC) price had spent the majority of Wednesday in a steady slump which saw the price drop from $6,494 to $6,147. The pullback mirrored the poor performance in traditional markets where the S&P 500 and Dow dropped by 4.41% and 4.44% respectively. 

The slump in traditional markets appeared to be a reaction to dismal news that the United States surpassed more than 200,000 Coronavirus cases. Earlier this week the White House also stated that it concurs with the estimate that up to 240,000 Americans could die from COVID-19 within the next 3 weeks. 

If true, this would likely extend the time social distancing and mass quarantine policies stay in effect, leading to additional damage to the economy. As advised by many market analysts, global markets are unlikely to show signs of bottoming until the Coronavirus pandemic is brought under control. 

Crypto market daily price chart

Crypto market daily price chart. Source: Coin360

Surprisingly, shortly after equities markets closed Bitcoin price broke from the pattern of lower highs with a sharp upside move which pushed the price to $6,744. 

The move came as the price was on the verge of falling below the $6,200 support to complete the right shoulder of a rather sloppy head and shoulders pattern on the 4-hour time frame. 

Had that occurred, traders would be looking at a target near $5,150 so for bulls the current surge above the $6,600 resistance level is probably a welcome relief. 

BTC USDT 4-hour chart

BTC USDT 4-hour chart. Source: TradingView

The push through the $6,250-$6,450 range brought Bitcoin above the $6,600 resistance and even though the price pulled back, traders are fighting to turn this level to support. Once above $6,600 traders will target $6,725 and $6,900. 

BTC USDT daily chart

BTC USDT daily chart. Source: TradingView

On the daily timeframe, the volume profile visible range shows that above $6,900, the $7,100 to $7,200 zone could present stiff resistance. For the short term, holding $6,600 as support then setting a higher high above $6,900 would be a positive step forward. 

Alternatively, if the Bitcoin price loses momentum, a pullback to retest underlying support at $6,400 (Bollinger Band moving average) and $6,300 is likely. If the event of a stronger correction, Bitcoin price has support at $6,200, $5,850 and $5,350. 

Over the coming hours, traders should keep an eye on the shorter time frame buy and sell volume to see if the price will either hold $6,600 or pullback from the upper Bollinger Band arm to retest $6,400 where the Bollinger Band moving average is. 

If the price drops below the 20-MA of the indicator then a retest of the $6,200 support which is slightly above the lower Bollinger Band arm. 

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.

Fed’s Quantitative Easing Strategy Holds Long-Term Benefits for Crypto

These are perilous times, and it hasn’t escaped anyone’s notice that the United States Federal Reserve is doing its part to alleviate the suffering — which began with the coronavirus pandemic and has spread to the global economy. It’s printing more money. 

“There is an infinite amount of cash at the Federal Reserve,” Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, told Scott Pelley of CBS on March 22, adding: “We will do whatever we need to do to make sure there is enough cash in the financial system.”

The U.S. Federal Reserve itself reinforced that message on March 23, announcing that it would “continue to purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning.”

The death of capitalism?

Reactions to these affirmations of quantitative easing, or QE, have been swift from sectors of the crypto community: “With these words, the last vestige of #capitalism died in the US,” wrote Caitlin Long, who established the first crypto-native bank in the United States. “[The] Fed’s monetization U.S. debt is now unlimited.”

Mati Greenspan, the CEO and co-founder of Quantum Economics told Cointelegraph: “The Fed said it is willing to buy the entire market” if necessary to stabilize markets. Meanwhile, on the fiscal side, Congress’s $2 trillion stimulus package includes handouts like “helicopter money” — i.e., a $1,200 payment to every tax-paying adult who has an annual income below $75,000. “Inflation is pretty much a foregone conclusion at this point,” he stated elsewhere.

Garrick Hileman, head of research at Blockchain.com, told Cointelegraph: “The response by central banks to COVID-19 is truly unprecedented, with Fed and Bank of England officials using terms like ‘infinite,’ ‘unlimited’ and ‘radical.’” They’ve been using such extraordinary language in the hope they’ll prevent equity and credit markets from seizing up. “Only time will tell if they have gone too far.”

The U.S. dollar is dominant

Is inflation really imminent, though? Not if one recognizes that the global demand for U.S. dollars continues to exceed supply. As Civic CEO Vinny Lingham told Cointelegraph: “The reality is: Everyone needs to reprice assets, and they need to do it in U.S. dollars.” 

Lingham grew up in South Africa. He saw what happened with hyperinflation in neighboring Zimbabwe where “the demand for stable currency exceeded everything else.” With people in the grip of the current pandemic, entire business sectors have been shutting down all over the world. People have been selling assets whether it’s equities, collectible classic cars or Bitcoin (BTC). Lingham added:

“If I’m living in South Africa, I may have kept money in the form of a bar of gold that is priced in Rands. Now I’m selling it for local Rands and buying U.S. dollars with those Rands. As the Rand devalues, the dollar gets stronger.” 

Under such conditions, “if the Federal Reserve prints another $2 trillion USD, it’s okay,” said Lingham. Greenspan agrees that the U.S. dollar has been the world’s most in-demand financial asset in recent weeks, and theoretically, the Fed could print trillions more than it is currently proposing — and there may not be any hyperinflation. The problem is that no one knows what the “stop point” is — i.e., how much is too much. “We won’t know [hyperinflation is] happening until it’s too late.”

BTC as a store of value?

What does all of this mean for cryptocurrencies? Many in the crypto world assume that Bitcoin, with its fixed maximum supply — 21 million BTC — is bound to come out ahead if the Fed and other central banks print too much money. “Though that assumption has not been tested in real-time except in Venezuela,” said Greenspan. If you had bought BTC at its low point in Venezuelan bolivars and had sold BTC at its height, also for bolivars, you would have come out way ahead. It’s not clear that this case can be generalized, though. During the current crisis, BTC and other cryptocurrencies have plunged dramatically, just like equities — which has somewhat damaged Bitcoin’s claim of being a store of value. 

The current economic environment is not favorable for any asset class, Lingham observed. Bitcoin i3s now positively correlated with other asset classes. Greenspan said the correlation between BTC and the stock market has recently reached a high point of 0.6 — with 1.0 representing perfect positive correlation. If this were not the case, BTC would currently be priced somewhere between $12,000 and $15,000, Lingham suggested. 

Ariel Zetlin-Jones, associate professor of economics at Carnegie Mellon University’s Tepper School of Business, told Cointelegraph that he understands this moment is critical for the future of cryptocurrencies:

“U.S. equity markets have suddenly become as volatile as Bitcoin markets, and the U.S. government is undertaking a large scale intervention that involves a massive expansion of the money supply which in the absence of other major shocks (the economic shutdown due to the pandemic), would normally induce a large increase in the inflation rate.”

However, Zetlin-Jones does not see these developments causing Bitcoin to emerge as a leading store of value because in the long run: “Bitcoin is one of the riskiest stores of value in the world, with Bitcoin price volatility more than five times that of both gold or even U.S. equity prices.” Kevin Dowd, a professor of finance and economics at Durham University in the United Kingdom, told Cointelegraph:

“BTC does offer an alternative store of value, and there is no question about that. The issue is: How good is it? It all depends upon when you buy and when you sell, and so there remains a huge element of luck.”

According to Hileman, the University of Cambridge’s first “cryptocurrency academic,” the prices of gold and Bitcoin should both rise:

“Even before COVID-19, we felt the unprecedented level of public and private debts made Bitcoin, and hard assets in general, attractive. Historically, recessions and large fiscal and monetary expansions have driven up the price of hard assets like gold. […] We do not see a reason why this time should be any different.”

The future of crypto?

It is still too early to gauge the impact of QE on crypto, said Greenspan. “The initial shock of the global economy grinding to a halt” is still too fresh. “The long-term trend is yet to emerge.”

Moreover, BTC is just a small part of the story, though it has held its value well compared with other asset classes, Greenspan told Cointelegraph.

People have been struggling, and many individuals are selling everything they can, said Lingham. “Until there is excess capital, Bitcoin is in the same basket as other assets. There will be no mad rush to get into cryptocurrency unless the U.S. dollar falters” — and then, only maybe.

“I would be surprised if BTC bit the dust due to the current crisis, but you cannot rule anything out,” said Dowd, who has maintained in the past that Bitcoin’s price must go to zero in the long term — principally because its mining model, a natural monopoly, is unsustainable. 

In the short term, meanwhile: “The injection of money tends to float all markets, and that includes crypto,” said Greenspan. “Stocks will be first, but [the fiscal stimulus] is also likely to push up the price of BTC.” 

A more decentralized global economy?

The current crisis might eventually impel structural changes in the world economy, however, and these could change the crypto and blockchain space — for the better. Zetlin-Jones told Cointelegraph that once the recovery begins, a new way has to be found:

“We will need a more robust economy — one where supply chains are less dependent on a single producer, where workers are less dependent on the operations of a single firm, where individuals are less dependent on a single source of health care.” 

These are effective movements toward a more decentralized world economy, in which blockchain technology seems uniquely poised to play a key role, Zetlin-Jones said. “They might speed up the demand for blockchain solutions and, therefore, [improve] the long-run viability of blockchains and their associated cryptocurrencies.

How to Trade Bitcoin Using Leverage and Not Worry About Liquidation

Institutional traders have long known the benefits of derivatives trading, including leverage and hedging. By trading options markets, one can predetermine maximum gains and losses, even with volatile assets like Bitcoin (BTC). 

Despite being far more complex, such instruments allow traders to generate gains independent of what happens over the next weeks or even months, which is essential for traders’ peace of mind to achieve optimal performance.

Retail traders have only recently begun using derivatives, although they have focused almost exclusively on futures contracts offered by BitMEX, OKEx, Binance and so many others. The main problem here is liquidation risk, as cryptocurrencies are incredibly volatile.

Buying a call option? Here are the costs and benefits

The buyer of a call option can acquire Bitcoin for a fixed price on a predetermined date. For that privilege, the buyer pays an upfront premium for the call option seller. Contracts have a set maturity date and strike price so that everyone knows potential gains and losses beforehand.

If Bitcoin appreciates over the following hours or days, the price paid for this call option should increase. The buyer could either sell this option contract and close his position with a profit or wait until contract expiry.

At the specified contract date and time of maturity, the call option buyer will be able to acquire Bitcoin for the previously agreed price. Remember, the buyer paid a premium in advance for this right. If Bitcoin’s price is currently below the contract price, the buyer can walk away. That’s why it’s called an “option” in the first place.

Each exchange sets its minimum trade size, although a 0.1 Bitcoin contract tends to be the lowest figure.

Benefits of Bitcoin options compared to futures contracts

The main benefit to the buyer of an option is that they know in advance the maximum loss and also do not have to worry about having their position closed in advance. 

Let’s imagine a scenario in which an investor has $500 and expects the price of Bitcoin to increase substantially over the next month. By using futures contracts, it is possible to leverage their position, boosting gains by 20 times or even 50 times.

It should also be said that there is one risk with this strategy. What happens if over the following days the market suddenly drops 2% or 5%, an occurrence quite frequent with Bitcoin. If this happens the position will get liquidated or forcibly terminated. Meaning,  even if markets recover shortly thereafter, there is no second chance for the option holder.

BTC call option buyer returns

Theoretical return for a call option buyer

Theoretical return for a call option buyer

The example above shows that the call option buyer paid a $450 premium upfront for the option to acquire a Bitcoin at a fixed price of $7,500 on April 24. The buyer has a limited downside of $450, while their upside is unlimited.

The premium paid upfront for a call option depends on:

Current Bitcoin price: If Bitcoin is trading at $5,000 and the expiry takes place in 10 days, a call option with a $9,000 strike price will most likely cost less than $40. On the other hand, a $4,000 strike should set the buyer back $1,100 or more.

Days until maturity: The higher the number of days until maturity, the higher the price of a call option will be. Assuming both have the same strike price, the one with the farthest expiry will tend to cost much more.

Recent volatility: If the price hasn’t oscillated very much over the past 30 or 60 days, odds for a substantial price increase are low. Low volatility causes call option prices to be lower when compared to a high volatility scenario.

Interest rate: A high-interest rate would result in excessive premiums of options. Fortunately, that hasn’t been the case, as the cost of borrowing money is currently close to zero.

Call option prices screenshot on March 26

Call option prices screenshot on March 26. Source: Deribit

Because Bitcoin traded at $6,730 on March 26, one should expect a $6,000 strike for a call option to cost $800 or higher. On the other hand, an $11,000 strike price in just 28 days seems quite unlikely to happen, hence its $90 price.

It might seem unreasonable to sell a call option with unlimited downside in exchange for a fixed upfront. Except, that is not the case if the investor already owns Bitcoin. Under this new perspective, the call option seller is potentially getting paid more than making a regular sale.

Buying a protective put option

A put option grants its buyer the opportunity to sell Bitcoin at a previously agreed-upon price on a future date. Once again, the buyer pays an upfront premium for this privilege. Instead of using a stop-loss order on a regular exchange, a holder can reduce their losses from a price drop using options contracts.

With Bitcoin currently trading near $6,730 levels, a $6,000 put option contract expiring in 27 days costs $440. If Bitcoin drops to $5,000, this investor would then be able to make a sale for the predetermined price of $6,000, resulting in a net loss of only $170.

Investors tend to consider this strategy as insurance. If the price of Bitcoin does not drop below the $6,000 strike price, the investor paid a 6.5% premium for nothing. Their upside, on the other hand, has been reduced by $440, although it remains unlimited.

Options provide a nearly endless limit of investment strategies

The fact that a call option buyer has an unlimited upside — and unlike futures contracts, can’t be forcibly liquidated during the trade — should be an excellent incentive that encourages retail traders to use it more often.

In addition to the basic methods described above, there’s much more to options trading, including strategies that combine different strikes and maturities. Institutional traders have long been taking advantage of those instruments and this allows them to take time off-screen and prepare for different investment scenarios by hedging their positions.

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.

Russia Postpones Its Crypto Law Again, Now Blaming Coronavirus

After facing multiple delays, the adoption of Russia’s major cryptocurrency law will be postponed again, now due to the coronavirus.

Anatoly Aksakov, chairman of the Russian State Duma Committee on Financial Markets, says that the country’s crypto law — the bill “On Digital Financial Assets” — is now finalized but won’t be adopted before the end of the spring 2020.

Russian authorities have been arguing about crypto regulation since January 2018

According to a March 31 report by Russian news agency RBC, Aksakov has admitted that previous delays in the bill’s adoption were caused by disagreement on the new asset type between local authorities. Aksakov, who is also chairman of National Banking Council at Russia’s central bank, reportedly elaborated that the central bank opposed legalization of crypto while the State Duma advocated some crypto initiatives.

However, the long-awaited law is being postponed for another reason now. As Russia shifts its focus to priority actions against the COVID-19 pandemic, all legislative processes have slowed down, Aksakov reportedly noted. As reported by Cointelegraph, the bill has seen a number of delays after first being introduced in January 2018.

Aksakov says that Russia’s crypto law will not hinder operation of local crypto exchanges

Aksakov reportedly added that Russia’s upcoming crypto law will provide a definition of cryptocurrencies and prohibit the use of crypto as payment. Additionally, the law will include the issuance and circulation of digital assets, the official reportedly noted. However, in mid-March, a legal executive at Russia’s central bank said that the bill would ban the issuance and circulation of cryptocurrencies.

Aksakov also emphasized that the new law won’t hinder operation of crypto exchanges in case they won’t be violating it. The official also highlighted that the bill “On Digital Financial Assets” won’t include regulations regarding cryptocurrency mining. However, Aksakov expressed confidence that profits from crypto mining should be taxed, noting that crypto mining is a “type of business that produces value.”

Aksakov’s latest remarks about the new delay in adopting Russia’s upcoming crypto law comes subsequent to Russia recording its biggest one-day rise in coronavirus cases for the sixth day in a row. As reported by Reuters, Moscow’s authorities have already ordered residents to self-isolate, while the nationwide lockdown is being considered.

On March 24, the Ministry of Economic Development of the Russian Federation reportedly released a draft law that would allow the testing of cryptocurrency and blockchain developments within a special regulatory sandbox.

Bitmain’s Antminer E3 to Continue Mining Ether With New Update

While some cryptocurrency miners are purportedly shutting down due to unprofitability, Chinese mining giant Bitmain continues to not only see its new products sold out but is also improving some of its older flagship devices.

Bitmain’s Antminer E3, a popular ASIC miner was suspected to become obsolete by April 2020, will continue mining Ether (ETH) at least till October 2020.

Bitmain previously confirmed that Antminer E3 would stop mining Ether

According to a March 30 blog post, Antminer E3’s lifespan is prolonged with specifically designed firmware launched by Bitmain. According to the announcement, the new firmware was developed to allow miners to continue using Antminer E3 “even after March 2020.”

Specifically, Antminer E3’s new firmware addresses a problem with directed acyclic graph (DAG) files, which was first reported by altcoin mining pool 2Miners in February 2020. According to 2Miners, DAG growth was the primary reason for limiting the capability of Antminer E3s for mining Ether and Ethereum Classic (ETC) due to limited memory capacity.

While Bitmain subsequently confirmed the DAG growth problem, stating that its double date rate (DDR) memory was approaching the limit of 4GB, 2Miners calculated that Antminer E3 would stop Ether mining roughly on April 8, 2020.

Bitmain’s firmware addresses DAG growth issue directly

However, Antminer E3’s lifespan has now been extended with the new firmware that addresses the DAG problem directly. According to Bitmain, the new firmware will expand the usage of DDR memory, as more space is needed to process DAG files.

With the new firmware update, the final approximate block height of the Antminer E3 is 11,400,000, the blog post says. While Bitmain is confident that E3 miners will continue being operable after April 2020, the miner will still support mining until October 2020, according to the firm’s calculations. Bitmain had not responded to Cointelegraph’s requests for comment.

Released by Bitmain in April 2018, Antminer E3 was touted as the “world’s most powerful and efficient EtHash ASIC miner.” As reported by Cointelegraph, Ethash is the Proof-of-Work (PoW) hashing algorithm used by Ethereum and a variety of other altcoins such as ETC. Meanwhile, the Ethereum network is poised to gradually shift from PoW to Proof-of-Stake consensus.