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.

The Descent Continues

This marks a return of futures leading the cash market that was absent or reversed for the last month. Interestingly enough, pricing on cash exchanges was above pricing in CME futures ever since breaking above $40,000. This could be interpreted as buyers purchasing from online exchanges rather than buying futures contracts because they plan on hodling (holding long-term) rather than simply trading the asset.

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This reveals that much of the luster of Bitcoin has temporarily faded from the cryptocurrency, and we may be exiting a period of frantic buying where the number of coins purchased exceeds the number of coins mined each day. This is certainly hinting towards further price decline at the very least a period of consolidation at or below $50,000 before Bitcoin will rally to new highs above $61,000.

Another recent development in the cryptocurrency markets is that while Bitcoin’s market cap still remains well above the $1 trillion threshold that it broke through in the last 30 days, its dominance of the total crypto ecosystem is on a decline. Since the beginning of the year, Bitcoin accounted for approximately 70% of the entire cryptocurrency market. Since the start of the year, it has lost some of its dominance over the digital asset ecosystem and today broke below 60% of the total market cap for all cryptocurrencies.

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Ethereum has also been losing some of its hold over the crypto markets while still firmly in second place. Overall it has lost some of its dominance as well, falling from 17% last month to 12% of the total market cap of well over $1.5 trillion. This has given a few of the alt. coins a chance to play catchup.

Traders that took our call to go short last Monday should keep their targets and sell at the specified areas in our proper action column.