Derivatives
Bitcoin pushes to $40K, but are bulls strong enough to win Friday’s $735M options expiry?
Bitcoin (BTC) price has been stuck in a falling wedge pattern for the past two months and during this time it has tested the $37,600 support on multiple instances. Adding to this “bearish” price action, BTC is down 16% year-to-date, which is in line with the Russell 2000s performance. Bitcoin/USD 1-day chart at FTX. Source: TradingView The real driver of Bitcoin’s current price action is investors’ concerns about worsening macroeconomic conditions. Professional investors are worried about the impact of the U.S. Federal Reserve’s tightening economic policies and on May 3, billionaire hedge fund manager Paul Tudor Jones said that the environment for investors is worse than ever because the monetary authority is raising interest rates when financial conditions are already worsening. On ...
Afraid to buy the dip? Bitcoin options provide a safer way to ‘go long’ from $38K
The last time Bitcoin (BTC) traded above $50,000 was Dec. 27, 2021. Since then, four months have passed, but traders seem somewhat optimistic that inflation has hit the necessary threshold to trigger cryptocurrency adoption. In theory, the 8.5% inflation in the United States means that every five years, the prices increase by 50%. This essentially turns $100 into $66 by slashing 33% of the dollar’s purchasing power. The U.S. Federal Reserve FOMC meeting is expected to rule on the interest rates on May 4, but more importantly, the FED is expected to announce a program to offload part of its $9 trillion balance sheet. Thus, instead of supporting debt and mortgage markets, the U.S. Central Bank will likely sell $95 billion worth of these assets every month. The consequences could be severe an...
Ethereum on-chain data hints at further downside for ETH price
Analyzing Ether’s (ETH) current price chart paints a bearish picture, which is largely justified by the 11% drop over the past month, but other traditional finance assets faced more extreme price corrections in the same period. The Invesco China Technology ETF (CQQ) is down 31% and the Russell 2000 declined by 8%. Ether price at FTX, in USD. Source: TradingView Currently, traders fear that losing the descending channel support at $2,850 could lead to a stronger price downturn, but this largely depends on how derivatives traders are positioned along with the Ethereum network’s on-chain metrics. According to Defi Llama, the Ethereum network’s total value locked (TVL) flattened in the last 30 days at 27 million Ether. TVL measures the number of coins deposited on smart contr...
Pro traders turn into bears after Ethereum price dropped to $3,200
After a 42% rally over a three-week period, Ether (ETH) peaked at $3,580 on April 3 and since then, a 12% correction to $3,140 has taken place. Tech giants launching their own smart contract platforms and regulatory uncertainty might have impacted investors’ sentiment and derivatives metrics also show worsening conditions that confirm professional traders’ shift toward a bearish sentiment. Ether/USD price at FTX. Source: TradingView On April 6, the Financial Times reported that Meta is reportedly planning to introduce virtual currency and lending services. This move is aimed at exploring alternative sources of revenue for Facebook, WhatsApp, Instagram and Messenger. United States Senator Pat Toomey, the ranking member of the Senate Banking Committee, also drafted a bill proposing a r...
Bitcoin price drops to $43.5K, but data and BTC’s market structure project strength
Bitcoin (BTC) has been struggling to break the $47,000 resistance and even with April 6’s drop below $44,000, there is still mounting evidence that the market structure is healthy. On Dec. 3, 2021, Bitcoin initiated a 25.6% correction that lasted 18 hours and culminated with a $42,360 low. Four months later, the price remained 18% below the $56,650, closing on Dec. 2, 2021. Much has changed over that period, and hard evidence comes from other sections of the sector. Between February 15 and April 2, 2022, enterprise software development firm MicroStrategy announced the acquisition of 4,197 Bitcoin. Inflows to Canadian Bitcoin exchange-traded funds (ETFs) also hit an all-time high, according to data from Glassnode. These investment vehicles in Canada have increased their holdings by 6,...
Pro traders curb their enthusiasm until Ethereum confirms $3,400 as support
Ether (ETH) price jumped 11% between March 26 and March 29 to reach $3,480, which is the highest level in 82 days. Currently, the price is down 9% year-to-date but does data support the belief that the altcoin has resumed its uptrend toward a new all-time high? Institutional investors seem excited that the CoinShares Digital Asset Fund Flows Weekly Report revealed on Tuesday that the exchange-listed crypto products inflows reached the highest level in three months. Data showed that investment products for digital assets saw net deposits of $193 million last week. At the same time, the Office of Science and Technology Policy, an executive office of the President of the United States, launched a study to offset energy use related to digital assets. Furthermore, on March 9, U.S. Preside...
Here’s why Bitcoin bulls will defend $42K ahead of Friday’s $3.3B BTC options expiry
Over the past two months, Bitcoin (BTC) has respected an ascending triangle formation, bouncing multiple times from its support and resistance lines. While this might sound like a positive, the price is still down 11% year-to-date. As a comparison, the Bloomberg Commodity Index (BCOM) gained 29% in the same period. Bitcoin/USD 1-day chart at FTX. Source: TradingView The broader commodity index benefited from price increases in crude oil, natural gas, corn, wheat and lean hogs. Meanwhile, the total cryptocurrency market capitalization was unable to break the $2 trillion resistance level and currently stands at $1.98 trillion. In addition to 40-year record high inflation in the United States, a $1.5 trillion spending bill was approved on March 15, enough to fund the government through Septem...
Bitcoin rally hopes diminish as pro traders flip bearish, retail interest at 12-month lows
Bitcoin (BTC) has been trapped in a symmetrical triangle for 56 days and the trend change could last until early May, according to price technicals. Currently, the support level stands at $38,000, while the triangle resistance for daily close stands at $43,600. Bitcoin mining up, retail interest down Bitcoin/USD price at FTX. Source: TradingView The week started with a positive achievement for the Bitcoin network as the Lightning Network capacity reached a record-high 3,500 BTC. This solution allows extremely cheap and instant transactions on a secondary layer, known as off-chain processing. After cryptocurrency mining activities were banned in China in 2021, publicly-listed companies in the United States and Canada attracted most of this processing power. As a result, Bitcoin’s hash...
Bitcoin’s got 3 strikes, but investors remain calm despite price drop
After Bitcoin (BTC) faced its third consecutive rejection, investors became more confident in adding altcoin positions. For the leading cryptocurrency, the path to $50,000 appears more challenging than previously expected. According to Euronews Next, on March 14, the European Union rejected a proposed rule that could have banned the energy-intensive proof-of-work (PoW) mining algorithm used by Bitcoin and other cryptocurrencies. Several EU parliamentarians have been pushing to ban PoW mining over energy concerns. BTC/USD price at FTX. Source: TradingView In terms of performance, the aggregate market capitalization of all cryptos was relatively flat over the past seven days, registering a modest 0.4% gain to $1.77 trillion. However, the apparent lack of performance in the overall market doe...
Cryptocurrencies against the ‘silent thief.’ Can Bitcoin protect capital from inflation?
The world is becoming increasingly volatile and uncertain. The assertion that “inflation is the silent thief” is becoming less relevant. In 2021, inflation has turned into a rather loud and brazen robber. Now, inflation is at its highest in the last forty years, already exceeding 5% in Europe and reaching 7.5% in the United States. The conflict between Russia and Ukraine affects futures for gold, wheat, oil, palladium and other commodities. High inflation in the U.S. and Europe has already become a real threat to the capital of tens of thousands of private investors around the world. Last week at the Federal Open Market Committee (FOMC) meeting, Federal Reserve Chairman Jerome Powell said that he would recommend a cautious hike in interest rates. At the same time, Powell mentioned that he ...
Bitcoin derivatives metrics reflect traders’ neutral sentiment, but anything can happen
Bitcoin’s (BTC) last daily close above $45,000 was 66 days ago, but more importantly, the current $39,300 level was first seen on Jan. 7, 2021. The 13 months of boom and bust cycles culminated with BTC price hitting $69,000 on Nov. 10, 2021. It all started with the VanEck spot Bitcoin exchange-traded fund being rejected by the United States Securities and Exchange Commission (SEC) on Nov. 12, 2020. Even though the decision was largely expected, the regulator was harsh and direct on the rationale backing the denial. Curiously, nearly one year later, on Nov. 10, 2021, cryptocurrency markets rallied to an all-time high market capitalization at $3.11 trillion right as U.S. inflation as measured by the CPI index hit 6.2%, a 30-year high. Inflation also had negative consequences on risk ma...
Softer-than-expected crypto regulation and stocks’ rebound position Bitcoin for a $42K close
Bitcoin (BTC) bulls jumped in to defend the $40,000 level after a devastating retest of the $38,000 support on March 7. The confidence and momentum that was building up earlier in the month was suddenly shattered after BTC failed to break $44,500 for the third time this month on March 2. The Bitcoin price rally on March 9 has partially been attributed to this week’s expected United States inflation data report. Analysts expect another 40-year record high as the consumer price index (CPI) reaches 7.9% yearly gains. Furthermore, a statement from the U.S. Treasury Secretary Janet Yellen on President Biden’s executive order on digital assets was somewhat milder than expected. Although deleted from the website, the order will apparently call for “a coordinated and comprehensive approach to digi...
