Bitcoin has just powered up to its highest price since January 8, 2018, knocking on the door of $16,000 as FOMO grips the markets once again.
In a move upwards that has added more than 12% over the past 24 hours, Bitcoin prices touched their highest levels for 33 months reaching $15,980 during early trading in Asia today, November 6, according to Tradingview.com.
The $16K level may form resistance since there were two weekly closes at $16,100 in early January 2018 so if this week’s candle can hold on to these levels, there could be a push higher towards that elusive all-time high. Chart patterns are currently reminiscent of those in late November 2017 when BTC made a rapid push from $7K to top $16K in just three weeks.
Analysts have noted that the price of Bitcoin is now 80% of its all-time high, the closest it has ever been to full recovery, which has only taken 12 days on average from these levels to ATH historically.
On the flip side, traders may start to take some profit here which could result in a pullback.
The ‘Fear and Greed Index’ is currently cranked over into the ‘extreme greed’ zone at 90. The last time it was this high was in June 2019 when it reached 92 as Bitcoin powered to its highest price for that year at just under $14K.
Experienced investors such as billionaire former hedge fund manager Mike Novogratz advised against emotion based selling in a recent tweet.
“The hardest thing to do in a bull market is to sit. My pal Paul Jones calls it the ‘pain of the gain’. This is a $BTC bull market. Your job is to sit on your hands and lock away your phone.”
The U.S. election results may have been the catalyst for this week’s rally as Joe Biden extends his lead over Donald Trump with the counting almost concluded. At the time of press, Biden was leading by 264 to 214 in the race to 270 with just five states left to go. Square has also just reported record breaking revenue and profit from Bitcoin sales on its Cash App.
New Bitcoin price concerns from JPMorgan at odds with ‘immense support’ at $52K
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1 hour ago
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April 21, 2021
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Bitcoin (BTC) is seeing a tsunami of new user adoption as a backdrop to prices likely bottoming at around $52,000, say analysts.
In a series of tweets on April 20, statistician Willy Woo led calls for calm about Bitcoin’s recent price dip and subsequent lingering $9,000 below recent all-time highs.
$1 trillion cap has created new “line in the sand”
Reiterating previous assertions, Woo argued that buyer support had firmly established Bitcoin as a trillion-dollar asset and that BTC/USD would, therefore, not fall much below the equivalent spot price to maintain it — around $53,000.
“This revisit of lower price has created incredibly strong price validation for Bitcoin about $1T cap. 14% of the supply last moved above $1T cap,” he wrote.
“This is a key line in the sand imprinted into BTC’s price discovery, an area of immense support.”
Chart showing Bitcoin support strength at a $1 trillion market cap. Source: Willy Woo/ Twitter
Woo also highlighted the continued transfer of coins from weak hands to strong, along with a surge in new users entering the space.
For fellow analyst William Clemente, this “hockey stick” shape of new adoption was of essential significance.
“This is the most important post of this thread by far,” he replied to Woo, who noted that technical traders had been far more bearish on Bitcoin despite the strength of on-chain indicators.
Bitcoin entity growth vs. BTC/USD. Source: Willy Woo/ Twitter
JPMorgan turns bearish on BTC… again
Among these was JPMorgan’s Nikolaos Panigirtzoglou, who in his latest note argued that this price dip would not see buyers step in like before.
Futures positions unwinding, he added, would not reverse and, thus, overall interest in institutional Bitcoin bets would now fade.
“Over the past few days Bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November,” Bloomberg quoted the note as stating.
“Momentum signals will naturally decay from here for several months, given their still elevated level.”
At the time of writing, BTC/USD was still undecided on its short-term trajectory, clinging to $55,000 as signs of life returned to certain altcoins.
One cryptocurrency no longer outperforming was Dogecoin (DOGE), which was down 18% on Wednesday after “Dogecoin Day” — an attempt to boost the price to $4.20 — fell flat on its face.
Bitcoin bears have a $340M lead heading into Friday’s BTC options expiry
Published
10 hours ago
on
April 21, 2021
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Bitcoin (BTC) price is making a slow recovery after facing a sharp 16% correction in the early hours of April 18.
While some analysts blame a 9,000 BTC deposit at Binance, others focused on the hashrate drop caused by a coal mining accident in China. Regardless of the reason behind the $51,200 low, options market makers were forced to adjust their exposure.
Typically, arbitrage desks seek non-directional exposure, meaning they are not directly betting on BTC moving in any particular direction. However, neutralizing options exposure usually requires a dynamic hedge, meaning positions must be adjusted according to Bitcoin’s price.
These arbitrage desks’ risk adjustments usually involve selling BTC when the market drops, which as a result, adds further pressure to long liquidations. Therefore, it makes sense to understand the current level of risk as the April 23 options expiry approaches. We will attempt to dissect whether or not bears will benefit from a $50,000 BTC price.
The initial outlook seems balanced
Before the April 18 correction, BTC accumulated 74% gains in three months as it marked a $64,900 all-time high. Thus, it is natural for investors to approach protective options more heavily.
Bitcoin April 23 aggregate options. Source: Bybt
While the neutral-to-bullish call (buy) option provides the buyer with upside price protection, the opposite happens with the more bearish put (sell) options. By measuring each price level’s risk exposure, traders can gain insight into how bullish or bearish traders are positioned.
The total number of contracts set to expire on April 23 totals 27,320 BTC, which is $1.55 billion at the current $56,500 price. However, bears and bulls are apparently balanced as the call (buy) options total 45% of the open interest.
Bears have a decent advantage after the recent crash
While the initial picture seems neutral, one must consider that the $64,000 call (buy) and higher options are almost worthless, with less than three days left before expiry. A more bearish situation emerges when these 6,400 bullish contracts currently trading below $50 each are removed.
The neutral-to-bearish put options dominate with 70% of the remaining 19,930 BTC contracts. The open interest stands at $1.13 billion considering the current Bitcoin price, and this gives the bears a $450 million advantage.
One can see that bulls were caught off-guard as Bitcoin retraced 13% after the April 14 all-time high. A meager 3,000 BTC call options are left below $58,000, which is only 24% of the total.
Meanwhile, the neutral-to-bearish put options amount to 9,000 BTC contracts at $55,000 and higher strikes. This difference represents a $340 million open interest that favors bears.
As things currently stand, the expiries between $57,000 and $64,000 are reasonably balanced, which suggests that the bears have an incentive to keep the price down on April 23.
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.
Bad omen? US dollar and Bitcoin are both slumping in a rare trend
Published
21 hours ago
on
April 20, 2021
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The price of Bitcoin (BTC) has been struggling to stay above $56,000 on April 20, which whale clusters pinpointed as a crucial short-term price level.
Yet the U.S. dollar index (DXY) has continued to fall in recent weeks, dropping to its lowest point in seven weeks to 90.85.
Bitcoin (blue) vs. DXY (orange) Source: Tradingview
Why is this a concerning trend?
Alternative stores of value in the likes of Bitcoin and gold are priced against the U.S. dollar. Hence, when the dollar drops, the value of Bitcoin should theoretically increase as BTC trades against the dollar.
In recent days, however, Bitcoin has performed poorly following the highly anticipated public listing of Coinbase.
The trend is concerning because the probability is higher for Bitcoin to see an uptrend when the dollar is declining as shown by the inverse relationship in the chart above.
But in recent days, Bitcoin has been having a hard time remaining above a key whale cluster level at $56,000, which indicates that there is heavy selling pressure on BTC, particularly as the price is struggling to rebound above the 50-day moving average (green line in the chart below).
BTC/USD 1-day candle chart. Source: Tradingview
Moreover, some analysts say the dollar may see a relief rally. If this occurs, it should create a less favorable environment for Bitcoin to regain its momentum.
In a note to clients obtained by CNBC, Commerzbank strategist You-Na Park-Heger said that the eurozone’s vaccine optimism and the Federal Reserve’s firm stance on inflation likely drove the dollar’s decline.
While this put an immense amount of pressure on the dollar in the short term, in the weeks to come, Park-Heger said that the trend could possibly change.
She said:
“The economic recovery in the U.S. might drive up inflation expectations further, fuelling rate hike speculation. The news situation in the euro zone in connection with corona might change again as uncertainty remains high.”
But not everyone agrees that the dollar will resume its uptrend. Researcher Credit Agricole’s Valentin Marinov, for example, says that the attractive yields in alternative markets are putting pressure on the dollar.
Marinov explained:
“Indeed, the USD rally is all but distant memory by now and the currency’s underperformance seems to reflect the apparent divergence in the outlook between the slumping UST yields and the rather perky bond yields elsewhere. This is almost the exact opposite of the moves we saw in March.”
Co-founder of 10T Holdings co-founder Dan Tapiero also expects more downside for the dollar, stating that the USD bear market hasn’t even started.
In any case, the futures market and high leverage appear to have more of an immediate impact on Bitcoin’s price while a weakening dollar should continue to be a bullish factor for BTC in the medium to long terms.
Things might change for Bitcoin in near term
In the short term, Bitcoin could get a boost from some bullish news and regain technical momentum. For example, Venmo’s support for Bitcoin and Ethereum saw the price bounce back to $56,000.
Beginning today over 70 million customers will be able to buy, hold and sell crypto directly within the Venmo app as the feature gets rolled out over the next three weeks.
Additionally, WeWork has announced it will be accepting cryptocurrency payments and holding them on its balance sheet.
In the foreseeable future, this renewed momentum could allow Bitcoin to regain its footing after a week of rare underperformance in tandem with the USD.