Bitcoin and Gold Trading in Tandem?

If anything, the two are known for having a negative correlation. But when looking at both markets’ historical price action, I found a relationship that is not so black and white.

At the start of BTC futures trading (December 2017), Bitcoin fell hard and fast from its recently achieved record high of $20,000 down to about $7,000 by the start of February. At the same time, gold rallied from $1,240 up to $1,360. Over the next two years, this negative correlation can be seen as one asset would make a new high the other would be hitting a bottom. However, this all changed when the pandemic started.

In March of 2020, when covid officially became a global pandemic rather than a regional epidemic, both gold and Bitcoin experienced a flash crash. Gold went from trading at $1660 on March 9th, 2020, to a low of $1480 only ten days later. BTC futures were priced around $9,500 on March 5th, 2020, a low of $4,500 11 days later.

From that moment until now, the relationship between gold and bitcoin prices has matured into something new. Could one find instances where the price of one market would be at a top while the other was at a bottom? Yes, but there is more to it than that.

While looking at overlayed charts of gold and Bitcoin futures, it is pretty clear that gold recovered from the crash in March much faster than Bitcoin did. In fact, gold hit its all-time high ($2,088) precisely four months before BTC hit its record high ($60,000).

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This scenario in which gold action leads Bitcoin action by four months is quite interesting and can be viewed through the lows each achieved following their all-time highs. Once again, gold would find a bottom and trade sharply higher precisely four months before Bitcoin. I see this correlation as one that still exists. If so, it would suggest that Bitcoin is in the midst of a correction that could take it to below support at $44,000 down to the next level of support at $40,000 before a slight upside bounce followed by an even lower low (somewhere around $35k – $30k) before recovering back to where current pricing is now around $45,000.

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If this correlation holds, all of this should occur within the next few months.

 

Bitcoin Has Clear Path to $52,000 while Select Alt Coins near ATHs

At approximately 6 PM EST BTC futures are trading up 4.13% or $2,015 at $48,715. All through this week, when alt. coins were rallying, BTC retested its support at $44,000 made up by the 100-day M.A. and the 38% retracement level. Yesterday prices took off from this level and traded right up to resistance, closing at the highest level since May.

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Today pricing continued higher breaking through resistance at $46,000 and now has technical resistance between current prices and $52,000, which is where I believe it will trade to next week.

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Alt. Coins have also been on the rise in this all-inclusive crypto rally. Solana, Helium, Luna, and Cardano are all at or very close to their all-time highs. This is significant because all other coins are nowhere near their ATH; most are around 60% of their peaks. These cryptos are exhibiting very strong recoveries ahead of Bitcoin and Ethereum. Cardano, especially with its sizable market cap (third highest amongst all cryptos), is showing it could become a real competitor for Bitcoin in the future.

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Bitcoin Has Clear Path to $52,000 While Select Alt Coins Near ATHs

At approximately 6 PM EST BTC futures are trading up 4.13% or $2,015 at $48,715. All through this week, when alt. coins were rallying, BTC retested its support at $44,000 made up by the 100-day M.A. and the 38% retracement level. Yesterday prices took off from this level and traded right up to resistance, closing at the highest level since May.

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Today pricing continued higher breaking through resistance at $46,000 and now has technical resistance between current prices and $52,000, which is where I believe it will trade to next week.

Alt. Coins have also been on the rise in this all-inclusive crypto rally. Solana, Helium, Luna, and Cardano are all at or very close to their all-time highs. This is significant because all other coins are nowhere near their ATH; most are around 60% of their peaks. These cryptos are exhibiting very strong recoveries ahead of Bitcoin and Ethereum. Cardano, especially with its sizable market cap (third highest amongst all cryptos), is showing it could become a real competitor for Bitcoin in the future.

Crypto Market Cap Tops $2 Trillion

Bitcoin’s rally has slowed down in the past few days, consolidating above a key level. Currently Bitcoin futures basis the Comex continuous contract (BTC #F) is trading up $880 or 1.9% at $46,375.

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On August 9th, at the start of the week, Bitcoin surged through the last area, posing any natural resistance until $52,000, when on Monday, BTC broke above the 38% retracement and the 100-day moving average. Now that pricing has remained above it for two days (most technicians use three days as a rule of thumb), it appears that BTC has successfully made a massive milestone by flipping $44,000 into support.

The next target for bulls is the psychological level of $50,000 and the 23% retracement above it at $52,260. Although altcoins are also rallying (Ravencoin gained nearly 100% in the past week), Bitcoin has not been left in the dust, and for the most part, the world’s largest cryptocurrency by market cap has been posting some of the largest gains.

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Speaking of market cap, the total market capitalization of the entire crypto sector has grown significantly over the past month and is now on the cusp of $2 trillion. The total value of all crypto assets hit a high of $2.6 trillion on May 11th, and less than a month ago, on July 19th hit a low of $1.23 trillion. Bitcoin’s market cap has historically climbed or fell along with its price, and the two metrics are closely tied together as in most cryptocurrencies.

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Bitcoin is up 39.7%, and Ethereum is up 59.2% for the month. Needless to say, this last month has been extremely good to BTC bulls, and the atmosphere doesn’t appear to be changing anytime soon.

Bitcoin on the Path to $44k

As of writing, 4:22 PM Eastern standard Time BTC is poised to close near its highs on the day and solidly above resistance at $40,000. However, the next level of minor resistance is $42,000 which was only $500 or so away from today’s high.

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Another interesting facet is Bitcoin came close to matching Ethereum in gains today, 3.28% compared to Ether’s 3.9%. And while Ethereum’s market dominance has remained steadfast at 19% since April, Altcoins had been taking a bigger piece of the market cap. Away from Bitcoin, that trend has just recently shifted. Consider that for the last year, Bitcoin averaged below 50% dominance, but in the past four months it only popped above 50% for brief spurts that coincided with alt. coin drops in market cap.

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Bitcoin has seen dominance levels this low before back in 2018, only to recover market share after a six-month slump. I think it helps not to think of market dominance moving in straight lines but rather oscillating ratios.

Consider this the last time that BTC features broke solidly above $40,000 was May 8, 2021, the day that Tesla announced it had purchased billions in Bitcoin and would be soon accepting it as payment for their EVs. So, today’s close above $40,000 should not be overlooked in its significance. Not only was this the launchpad for pricing in early May, but for the last three months has served as absolute resistance. We also retested the support at a 200-day moving average currently pegged at $37,752 and has successfully held for the past three days, making me feel comfortable in saying that support is definitely at $37,750.

This is a very bullish setup for the world’s first digital asset and the only real resistance does not come in until approximately $44,000. That is why I believe we will see that price by the end of next week. Especially if we can hold and successfully flip $40,000 to the new support level, then $52,000 in the near term (1 to 2 months) is not only on the table. It’s the prime rib served to you on a silver platter.

Bitcoin and Ethereum Test Resistance

This puts pricing right up against resistance at $40,000, an area that BTC has yet to solidly close above since falling below it on May 19th. There is also resistance at $42,000 and at $44,000, but a break above $40,000 would be significant and likely signal the start of another rally in Bitcoin. BTC also retested support today at the 200-day moving average at $37,605, which matches up near the lows today at $37,465. This narrow band between support and resistance calls for little movement in the asset or that a break to either side is soon to occur.

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Ethereum is also trading up on the day by 8.95% ($222.43), currently at $2,706. This puts Ethereum right up against resistance like BTC, and the difference is unlike Bitcoin after this level there is not any technical resistance until after $3,000. The trend we witnessed this summer where Ethereum rose much greater on a percentage basis when compared to Bitcoin has re-emerged and is likely to continue. Over the last seven days Bitcoin has been flat, losing less than a quarter of a percent (0.24%). In the same time period Ethereum has gained over 18%.

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Ethereum having closed above its last major moving average (the 100-day) today has only its long-term 38% Fibonacci retracement level at $2,729 before having a clear shot to $3,350. Looking at the Greyscale Ethereum Trust (ETHE) on a weekly candlestick chart you can notice that we have had gaps to the upside over the last two weeks and closed at or near the highs for the last three weeks. This suggests that the rally is probably not going to stall at current resistance, and a break above would signal the rally is far from over in Ethereum.

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Powell Props Prices, but Traders Await Tesla to Surge

With the FOMC meeting having concluded today and Chairman Powell signaling that tapering of their monthly purchases of mortgage-backed securities would occur in tandem with the raising of fed funds rates, this means that tapering is most likely not going to occur this year or next.

This perceived bullish statement from the Fed propped up pricing of the world’s largest digital currency. As of 5:40 PM Eastern Standard Time, BTC futures are trading up 5.76% or $2185 on the day and are pegged at $40,090.

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Current pricing is now but up against the resistance at $40,000. If Bitcoin can take out the support level, we will see $45,000 being tested soon after. However, if we look back to February 8, 2021, which is the day BTC finally was able to break above resistance at $40,000, it took a huge headline to do so.

On February 8, when BTC did overtake $40,000, it had just been announced that Tesla had purchased 1.5 billion worth of Bitcoin and would soon be accepting it as a payment for their electric vehicles. This was a huge development that experienced a massive amount of media coverage and social media because of Elon musk’s involvement.

The impact of this can be witnessed when on May 12, Tesla announced it would be halting its bitcoin payment option. This accelerated bearish action in Bitcoin, which on that day opened at $57,000 with solid support at $50,000. On May 13, BTC crashed through that support level and began an accelerated correction hitting a low of $30,000 just seven days later.

Elon Musk’s influence over the price of BTC can be seen from the recent action last week when he hinted the electric vehicle maker might start accepting BTC as payment once again. This news helped propel bitcoin off its lows at 30,000 and into the current uptrend we are witnessing.

For now, Bitcoin will likely remain between $35,000 – $45,000 until another large fundamental bullish headline is reported. This could be anything concerning large-scale adoption and might easily be Tesla once again accepting Bitcoin as a payment option.

Bitcoin Gets Bumped Up but not Pumped Up

How After yesterday’s tremendous rise in Bitcoin and Bitcoin futures, today BTC gave up about half of Monday’s gains, and currently, as of 2 PM Eastern Standard Time, the most active August contract of BTC futures is trading down a little over 4% or $1625 on the day at $37,835.

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The description in the posting was worded in a way that had many believing that the juggernaut of e-commerce was looking into accepting cryptocurrency as a payment option in the future. This belief was enough to shift market sentiment, which at the time was extremely bearish. The result was the liquidation of over $950 million worth of crypto shorts which was enough to propel Bitcoin above $40,000 intraday on Monday.

The optimism was squelched when an Amazon spokesperson denied that the company would accept Bitcoin as a payment option this year. This brought pricing well off of the highs, but the statement did not state that Bitcoin wouldn’t be accepted in the following year or that another crypto isn’t being considered for a possible sooner integration. Nonetheless, when the announcement was made at around 4 PM Eastern Standard Time, Bitcoin’s price fell from its highs at around $40,000 down to approximately $37,750 in a single hour.

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On a technical basis, BTC futures still remain within the downward channel it has followed since the all-time highs in April. However, a few levels of resistance have now become areas of possible support. This includes the 50 and 200-day moving averages as well as the 2.618 Fibonacci extension at $33,000. As well as the current support level at the 50% retracement residing at $36,500. The volume levels in BTC had a dramatic spike today, giving the above-mentioned areas of support more validity.

Resistance remains at $40,000, and the ultimate support level at the 61.8% retracement of $29,750 has remained intact.

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Bitcoin – “₿” Better

Bitcoin futures are trading higher today after Elon Musk made supportive comments on “The ₿ Word” which is a “Bitcoin-focused initiative that aims to demystify and destigmatize mainstream narratives about Bitcoin, explain how institutions can embrace it, and raise awareness around areas of the network that need support.”

He hinted that Bitcoin might already be eco-friendly enough for Tesla to begin accepting it as a payment option once more, “It looks like Bitcoin is shifting a lot more towards renewables and a bunch of the heavy-duty coal plants that were unequivocally being used have been shut down, especially in China. I want to do a little more diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend towards increasing that number. If so, Tesla will resume accepting Bitcoin.”

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This conference brought enough bullish sentiment into the market to regain the $30,000 level after falling below this level yesterday. Yesterday was the first occurrence of a close below $30k since January 31.

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The bullish sentiment brought on by this conference that included Jack Dorsey (Square, Twitter) was welcomed but may be short-lived and may not be enough to stem the bearish wave that has enveloped the entire crypto sector.

Bitcoin, which leads the entire crypto sector with its price action, looks quite precarious, with a death cross looming on the charts between the 50 and 200-day moving averages.

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Bitcoin – “The Rock Bottom”

Once again, this level is technically significant as it represents a 61.8% retracement from where we mark the beginning of the rally that took us to all-time highs. This is important to note because this would be a logical level for a deep retracement to find support and pivot from. With so many bearish fundamentals in the form of a regulatory crackdown, and negative media/social media, it is easy for one to lose hope for a quick return back to rally mode. However, this Holy Grail of technical integers (1.618) having foretold the most likely pivot point, and that pivot point has held astonishingly. So, on a purely technical basis, things don’t look so bleak, and I have found that BTC moves follow technical order more so than most markets.

The negative social media I am referring to is, of course, is the tweetstorm released by Dogecoin’s co-creator Jackson Palmer. He basically laid out a 10-part tweet on why he chose to leave the crypto industry; here are some keywords,

“After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents…

…Despite claims of “decentralization,” the cryptocurrency industry is controlled by a powerful cartel of wealthy figures who, with time, have evolved to incorporate many of the same institutions tied to the existing centralized financial system they supposedly set out to replace.”

This had an effect on the markets, although mostly to Dogecoin itself, which suffered the biggest drawdown (5.49%) as of 6:30 PM Eastern Daylight Time. All of the other major crypto’s besides Binance Coin (BNB) continued on their current trajectory with small but steady declines across the board.

Bitcoin on spot exchanges at 6:30 PM EDT is trading down roughly $1150 on the day, equivalent to a 3.5% drop. In the same timeframe Ethereum has fallen roughly the same amount down 3.9% on the day, the other two autistic twins Cardano and Ripple were down slightly less at approximately a 3% decline for the other two coins I put (at least with Ripple) in the same category as a doge.

I want to apologize as I was not specifically clear with my last article as I stated that there were two scenarios that were both the most likely one. What I meant to say was that these two scenarios were together the most likely scenario meaning one of these two would probably be the outcome. We can definitely deduce that the slow and stable range-bound scenario appears to describe the current action in the markets. However, another mistake I made drawing my wedge in my last article was putting the flat bottom above where support is. When we do this, we see that we are still inside of a flat bottom descending top that has yet to reach its apex.

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With all this considered, my forecast is that we will remain somewhat stable until we reach the apex, which could be next week. And when we do reach that apex, a breakout will occur, but it is not written in stone which direction that will take as of yet. So, with all the doubters coming out recently against crypto amidst widespread regulatory crackdown as a technical trader and a Bitcoin bull, I can’t forgo that there is a strong possibility that the breakout will take us to higher pricing as we have completed the checklist for a strong correction already.

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Bitcoin – End of the wedge and CPI disconnect

The report indicated that inflation continues to rise at an accelerated pace, with inflation rising for consumers by 5.4% over last year. Something has changed over the past few months, whereas Bitcoin and other assets typically seen as a hedge against inflation have had a disconnect with recent data.

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A few months back, on April 13, when the March 2021 CPI was released showing a spike up to 2.6%. That data helped to bring BTC to its highest ever price the following day, April 14, when intraday it reached above $65,000. At the same time, the data also helped traditional safe-haven assets such as gold continue to rally, breaking above its 50-day moving average two days later and above all its major moving averages over the next month. The following report released on June 10 did little to move the price of BTC or gold as both assets closed unchanged on that day.

Today’s CPI report had the same effect with gold and BTC, both closing with only fractional changes in price. However, the slight move in BTC futures took pricing below one of its support levels at approximately $33,000. This level coincides with a 2.618% extension of 2019’s rally starting from the beginning of the 2020 – 2021 rally. Since hitting an apex above $65,000, BTC has only closed below this price point a total of three times, including today.

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As long as we remain above major support at approximately $30,000, the most likely scenario is relatively stable pricing similar to action witnessed in June and July of last year (2020), where pricing remained inside of a $1000 range ($9000 – $10,000) before a breakout occurred. However, we have just about reached the end of the flat bottom, descending top pattern that has defined pricing over the last few weeks. And what that suggests is that we will likely get a breakout before the end of this week; that breakout will likely continue in the prevalent trend direction, which is to the downside.

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Clear Cut Symmetry Spells Further Selling in BTC

This puts the price back below the 200-day moving average. Today’s candle is almost identical to Monday’s candle with basically the same high and low, and bodies of the candle end at the same area, right around $32,750. $36,000 has become an area of minor resistance as pricing wasn’t able to move above this level for the entire week; with three of the five days this week, pricing traded to just below this level.

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The critical support level at approximately $30,700 was broken through on an intraday basis Tuesday of this week. This alludes to the possibility that we will get a break below this level in the coming weeks. If and when that occurs, I expect a violent fall down to $23,000 to backfill the gap that remains on the CME futures chart between December 24 and December 28 stretching from $23,000-$26,000.

On our weekly candlestick chart, notice that we have included a new Fibonacci data set starting from the lows of March 2020 to the all-time high hit in April 2021. You will see some astonishing symmetry between the candles between the run-up that lasted until May and the subsequent correction we are still immersed. Notice the correlation between the two moving averages the 15-day and 21-day (three week and seven week). On the way up, the 15-day severed as support during the steepest parts of the climb, and the 21-day was absolute support.

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The final apex hit at approximately $65,000 marked the end of the bullish channel. The following week notice how prices fully exited the bull channel the two moving averages also switched to a bearish alignment with the shorter 15-day on the bottom. This last week was the nail in the coffin according to my technical data. Not only were we unable to open and trade above the 15-day signaling the decline has hastened but the space between the moving averages is growing. This shows that the correction has gained momentum.

This week’s candle also closed well below the 50% retracement. Notice that on the way up pricing broke above and below this level three times (same as on the way down) after running up $12,000 the previous week creating the gap yet to be backfilled. In those last two weeks of December notice, it was one of the few times the 3-week moving average was truly support. Juxtapose that with current action where that same moving average has just become resistance. If the remarkable symmetry that has been prevalent from the rally beginning in October to the correction that began in April, then we are in for a swift fall to backfill the $23,000-$26,000 gap next week.

 

BTC in a Precarious Position

Last Tuesday is also when the death cross between the 50- and 100-day moving average occurred, providing the technical data for the selloff. Fundamentally most analysts are blaming the crackdown in China for this recent selloff.

As of 4:30 PM Eastern daylight Time, BTC futures are trading down by 8%, now fixed at $32,445. This most recent move took us below the 200-day moving average, which had acted as support for the past few weeks. Pricing must hold above the 61.8% Fibonacci retracement level occurring at $30,798 if it is to remain in the $30,000 price range. A break below this level could signal a further selloff taking prices as low as $20,000. The 61.8% retracement level has acted as support twice in the past two months and has served as a base for prices to move higher; this support is crucial for the near-term path of BTC futures.

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Another technical note is that last week’s action has cemented a head and shoulders pattern on a daily chart of BTC futures. This pattern usually identifies a trend reversal from bullish to bearish, which is precisely what we have been talking about over the past couple of weeks. This pattern is one of the most reliable patterns for predicting trend reversals and is signaling concurrently with the death cross that we will return to $20,000 pricing.

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Bitcoin And Ether Both Higher

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Today’s closing price is right where the Monday’s close, and we have effectively formed a Doji on a weekly candlestick chart. We continue to see BTC as being in a consolidation stage, unsure of which direction it will take next.

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But if you owned BTC futures, you made almost 5% in profits today, 7% if you owned Greyscale Ethereum Trust (+7.65%). ETHE went up more than Ethereum itself, which only gained +1.92% on the day at the time of writing.

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Bitcoin’s dominance continues to dwindle, now sitting at around 45%. And while Ethereum’s share of the crypto space has been rising, it still remains under 20%. It seems that Alt. Coins have benefited the most from this recent bull run.

Bitcoin and Banks

On the fundamental front, hundreds of U.S. banks (mostly small) have signed up for a service that will allow their customers access to Bitcoin.

“What we’re doing is making it simple for everyday Americans and corporations to be able to buy bitcoin through their existing bank relationships,” Sells said. “If I’m using my mobile application to do all of my banking, now I have the ability to buy, sell and hold bitcoin.” – Yan Zhao, president of NYDIG.

While Devotion Public Data, which is a merchant to keeps money with almost 300 million financial records, will deal with the connection to moneylenders, NYDIG will deal with bitcoin care and exchange execution. Exposures will clarify that it is NYDIG, and not the banks, that handle the bitcoin, and the digital currency will not be FDIC-protected, as indicated by Zhao.

Bitcoin Recoups Recent Losses While Ethereum Breaks To New Highs

BTC futures traded up moderately today, gaining 2% in value, closing at approximately $56,600. More impressive is the close effectively above the 50-day moving average after closing below it on April 22nd. This short four-day period marked the first occurrence of pricing below this technical indicator since October 9th.

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On a weekly candlestick chart, you can clearly see that Bitcoin futures basically recouped all the losses of last week, although Bitcoin failed to re-enter the upward channel that took it past $65,000 nearly three weeks ago. Our outlook right now is cautiously bullish.

Ethereum, on the other hand, is looking fully bullish and has been on the rise. Ethereum, the world’s second-largest crypto by market cap, has gained nearly 14% in value in the last seven days, compared to Bitcoin, which gained nearly 2% in the same period. The second place in terms of Market capitalization is by a wide margin, Ethereum’s $310,000,000,000 next to Bitcoin’s $1,000,000,000,000 may be small, but in terms of 24-hour spot volume, it’s a lot closer of a call, with Ether’s numbers at $33 Billion and Bitcoin’s 24 hr. trading volume not too much higher at $46 billion.

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ETH has been more resilient than BTC during this last correction where ETH just continued higher to make new record highs, currently trading above $2,700 for the first time in history. Ethereum looks poised to tackle $3,000 by the end of the summer.

Higher CPI Should Boost More Than Just Gold Prices

BTC futures hit a high of $62,000 before backing off slightly. As of 4 PM, EST BTC is trading at approximately $60,500. This marks the first close above $60,000 for Bitcoin futures, and I believe we will see $65,000 by week’s end.

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The consumer price index is set to be released tomorrow at 8:30 EST, and the expectations are mixed, but it would make complete sense if it continued to climb. January 2021, the U.S. CPI was at 262.231. February was the last month to be released, and it hit an all-time high in the index of 263.161. With the March numbers set to be released tomorrow, we could see a BTC price spike if it continues its current trend higher.

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Usually, a higher CPI rate was good for gold, and it still is; however, I believe we will see more capital move into Bitcoin than into gold on inflationary fears. So, a spike in the Consumer Price Index tomorrow could quickly catapult Bitcoin futures towards $65,000.

As ETH follows moves in Bitcoin, expect a rise in Ether also, so traders who took our call last week to buy should remain long with stops at $1,900.

btc vs eth MONDAY CHART

Bitcoin Holds Its Ground While Ethereum Gains Ground

While Bitcoin remains within 5% of its all-time highs, showing some remarkable price stability, BTC futures did close slightly lower by almost 2%, bringing the price of April futures to $58,695.

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One of these sources is the financial media giant Bloomberg. On Tuesday, the outlet published a report on the most likely outcomes for the second quarter, this summary of which reads, “A more likely 2Q scenario is to breach $60,000 resistance and head toward $80,000. A backup toward $40,000 support is less likely, in our view.”

 

The innermost circle of the Bitcoin community, the beating heart of the blockchain, its miners, have recently been hoarding their earnings of new BTC rather than selling them as fast as they produce them minors have been accumulating their stashes of it. This suggests that many miners are expecting higher prices within the near future and therefore not immediately liquidating in expectations of higher returns down the line rather than diminished prices.

Thermo cap is a ratio that measures the collective block rewards miners have earned since the genesis of a blockchain. An article published in Yahoo Finance by Valdrin Tahiri utilized data from Glassnode and the market cap/Thermo cap ratio to conclude that BTC’s rally is nowhere near its conclusion point.

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An exciting ratio that has so far correctly predicted the two previous market tops is the MC/TC ratio. It simply divides these two values to find a ratio that can be used to assess whether the BTC price is trading at a premium regarding the rewards paid to miners.

“In 2011, 2013, and 2017 price peaks, the MC/TC ratio also reached a peak in overbought territory, which is designated as the area above 0.000004 (highlighted in red). During the 2011 peak, MC/TC was at 0.00000595, in 2013 it was at 0.00000491, while in 2017 it was at 0. 00000439.These were the only three times in bitcoin’s recorded price history that MC/TC was above 0. 000004.Currently, MC/TC is at 0.00000246. This indicates that there is ample time until the bull market is over.”

Like we had predicted last week when Ethereum cracked the $2,000 barrier, ETH is trading above $2,100, posting a sweet gain of nearly 15% on the day. We had also forecasted that ETH would reach $2,400 – $2,500 by the end of April. We still hold to this belief but believe we may see that price point hit even sooner. We recommend anyone with a membership to one of the many spot exchanges buy ETH with the above-mentioned price targets.

 

Ethereum Breaks $2,000 per Coin While BTC Returns to $60,000

This week Ethereum has risen by 25%, gaining 5% today alone bringing Ethereum to a new all-time high and cracking $2,000 for the first time. Bitcoin has returned to $60,000 and all though its not a new record considering the fact that it had been trading at around $6,000 one year ago a 10x annual price appreciation is nothing to sneer at.

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Ethereum now looks poised to take on $2,100 and I am expecting as high as $2,400 by the end of April. This should be accompanied by a new record high in BTC as the two tend to move in synchromism.

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The top two cryptos have also seen a decrease in volatility an aspect that makes investors more confident and has the possibility to bring in new ones. The Fact that Bitcoin futures never once broke below $50,000 after moving above this price point seven weeks ago. The two juggernauts of the digital currency revolution have certainly proven that they are not only here to stay but here to grow along the way.

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Do NOT Change The Channel

Yesterday’s candle did contain a lower high than today’s however let us not overlook that yesterday was the highest daily close in CME futures history, about $400 above current pricing. Through the eyes of a short-term daily candlestick chart the possibility we are entrenched in an extended fifth wave rather than an expanded flat or zig-zag type correction is looking exceedingly probable. With that in mind we could easily see a breach above $61,000 and reach a new all-time high and have the potential for pricing in the $70,000 – $80,000 range by next month.

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As for longer-term price action, our weekly candlestick chart reveals that the bullish channel we have been trading in since the middle of October is still well intact. Notice how it had a nitro boost halfway up this channel, illustrated by the body size more than doubling on our weekly candlestick chart. The time this channel began dumping a wet injection of nitrous oxide, interestingly, was indirectly tied to the starter of the engine.

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Oct. 21st was the day the fuse was lit by PayPal’s announcement of Crypto integration. This explosive growth was intensified by Tesla taking the first steps and helped lead other large corporations to look into benefits from blockchain. Suppose nothing else to grease the wheels of the typical payment process. The fact that Elon Musk started PayPal before he sold it and transitioned into Tesla, SpaceX, and other visionary endeavors may be entirely a coincidence. It is an intriguing one.

On our weekly candlestick chart, one more thing should not be overlooked. That is since mid-October when we entered this aggressively bullish channel is that it coincides with the first time the weekly RSI crossed above 70 a feat that was only accomplished for a two-month period during the rally of 2019. Since then, however this index was beneath the all-important band at 70 for fourteen months prior to Mid-October. Since breaking above 70 on the weekly RSI we have been in a historic bull run that took prices $50,000 higher in about six months all the while not deviating outside our trend channel with the RSI remaining above 70 for this entire period, currently pegged at 72.86. This is more evidence that we are in the midst of an extended fifth wave that will take us to a new all-time high and beyond.

 

Bitcoin’s Hybridization With The U.S. Dollar, The Buck Stops Here

Their rise continued into today as Visa announced in a statement stating, “Visa’s standard settlement process requires partners to settle in a traditional fiat currency, which can add cost and complexity for businesses built with digital currencies. The ability to settle in USDC can ultimately help Crypto.com, and other crypto native companies evaluate fundamentally new business models without the need for traditional fiat in their treasury and settlement workflows. Visa’s treasury upgrades and integration with Anchorage also strengthen Visa’s ability to directly support new central bank digital currency (CBDC) as they emerge in the future”.

This new method for swiftly exchanging and spending cryptos without exchanging them into fiat currencies through a third-party exchange is a new development for the cyrpto.com card or any credit card, for that matter. However, the technology behind USDC and other stable coins such as “Tether” (the most widely used stable coin, created in 2014) this widespread adoption and true integration is something of a recent development. Stable coins have helped people in making cross-border transactions both quicker and cheaper without the volatility associated with other cryptocurrencies. This is due to the fact that they are pegged to a fiat currency, almost always being the U.S. dollar.

In fact, taking a quick glance at coinmarketcap.com, one can easily see how Tether has been utilized as a means for sending or receiving funds more than Bitcoin and Ethereum combined. Today, for example, tethers volume in the last 24 hours was over $80 billion and has for the past few years held the title of the most widely used way to transfer funds via blockchain.

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Tether is supposed to be backed by cash reserves or reserved assets, although there has been some mistrust dealing with how much reserves they actually have on hand. USDC has overcome these concerns by having complete transparency — and giving users the assurance that they will be able to withdraw 1 USDC and receive $1 in return without any issues. To this end, it says a major accounting firm is tasked with verifying the levels of cash that are held in reserve and ensuring this matches up with the number of tokens in circulation. Although the volume in this stable coin is currently 80 times smaller than that of Tether, which has been in circulation for over six years, it offers so obvious advantages, and the three-year-old USDC will surely grow at a quick pace, especially with these new developments.

Bitcoin rose about steadily over the weekend, and the additional 3% earned today puts BTC futures at approximately $58,000, forming a sizable gap between today’s candle and Friday’s. At the same time, Ethereum gained a full 8% today alone. This is likely due largely to the fact that while Tether has been programmed to run on several blockchains, USDC is running exclusively through the Ethereum blockchain. Another aspect of stable coins that I think is being overlooked by other market technicians is their effect on the U.S. dollar. Not only does their increased usage reaffirm the dollar as the world’s reserve currency, but their spike in the digital currency world benefits the dollar directly instead of going against it as cryptocurrencies innately do. They are considering the fact that the more stable coins are used and in circulation directly equates to more purchasing of U.S. dollars and U.S. treasury bonds in the case of USDC.

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To illustrate this point, consider the following circumstances of the U.S. dollar index. After a rough four months of declining value in the U.S. dollar, in which time the index lost a whopping 11% in value. Now consider that a month ago, we had a reversal in the USD, a pivot from bearish to bullish. Now consider it was exactly one month ago when Visa announced they were going to soon be implementing the use of USD coin on their crypto.com card. Since then, the dollar has seen one golden cross between the 50- and 100-day moving averages and a stellar 3% increase in value drastically different than the months prior. I cannot claim this is entirely due to USDC, but I will put my neck on the line to suggest that it had a huge part in the dollar’s sudden reversal from bearish to bullish.

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This is a narrative where people have wanted to take part in the many benefits of Blockchain and decentralized ledgers but were stuck on the fact that digital currencies are not backed by any guarantee and are wildly volatile. These problems have had been remedied many years ago by the introduction of stable coins. In essence, these coins bridge the gap between fiat and crypto while at the same time guarantying value and minimizing their volatility. This topic is one that I will dive into in the future, most assuredly probably do that myself. All my editing show is your show part of it.