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Pro Traders Unfazed by Bitcoin Price Stalling at $12,400, Data Shows

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Bitcoin’s (BTC) recent rejection at $12,400 triggered $234 million in futures contract liquidations across derivatives exchanges. Despite a 30% rally in the past 30 days, maintaining the $11,700 level as support is undecided.

Bitcoin hasn’t seen a lower low ever since the mid-March 50% shakedown, which caused the price to test the sub-$4,000 level.

Bitcoin USD 4-hour chart. Source: TradingView

Surely there have been ups and downs over the past three weeks, although a clear uptrend has been present. Traders’ sentiment certainly wasn’t positive on August 2 after a $1,400 crash that liquidated $1 billion in futures contracts.

It’s natural for the human mind to give more relevance to recent events, especially when presenting a negative outcome. 

Traders using leverage will undoubtedly have a more agonizing experience when facing such large unexpected red candles during more extended timeframe uptrends.

Measuring leverage by funding rate

Excessive leverage from buyers will be reflected in the funding rate. This is because perpetual futures contracts, also known as inverse swaps, have an embedded fee for margin usage.

Funding rates are usually changed every 8 hours and they ensure that there is no exchange risk overexposure imbalances. 

If buyers are using more leverage than sellers, the funding rate will be positive and buyers will pay. The opposite occurs when future contracts sellers are the ones demanding more margin.

Bitcoin perpetual swaps 8-hour funding rate

Bitcoin perpetual swaps 8-hour funding rate. Source: Skew

After a brief positive spike on August 10, the funding rate was relatively calm during the next seven days. This trend changed earlier this week as the indicator reached 0.10%, equivalent to 2% per week.

This doesn’t necessarily translate to bullish investors, but it does signal that buyers are the ones using more leverage.

Options markets show few signs of stress

Volatility is the main gauge of price oscillations and it can either be calculated by historical prices or by the options market pricing, known as implied volatility. This means that regardless of the daily swings of the past week or month, implied volatility measures the present scenario.

Only those Bitcoin options with the strikes closest to current underlying market levels are used, meaning $11,000 to 13,000 ones at the present moment. Those are known as at-the-money options and used for the implied volatility calculation.

Bitcoin at-the-money options implied volatility

Bitcoin at-the-money options implied volatility. Source: Skew

Take notice of how the indicator barely moved over the past 48 hours. That certainly wouldn’t be the case had the market experienced a sudden $2,000 drop. This reinforces the thesis of the current Bitcoin correction being a healthy pullback, rather than a trend changing market move.

Top traders remain net-long

Exchange-provided data highlights traders’ long-to-short net positioning, allowing one to determine whether professional traders are leaning bullish or bearish. 

Despite discrepancies in methodologies, viewers will be able to monitor changes in this index and it provides a clear enough view of top traders’ net exposure.

Top traders longs/shorts

Top traders longs/shorts. Source: Binance, OKEx, and Cointelegraph

Overall, traders at Binance and OKEx have held net long exposure since July 27 and not even the sharp $1,500 Bitcoin price drop on August 2 was able to shift this bullish position.

Analysts became even more bullish on Bitcoin after the U.S. Federal Reserve reportedly considered not raising interest rates until inflation hits 2%.

Volumes remain strong

Volume changes provide insight on increasing and diminishing activity, especially after strong price movements.

Crypto total market capitalization and volume

Crypto total market capitalization and volume. Source: Tradingview

The trading volume within the entire crypto market faced a downtrend as total market capitalization drifted sideways near $260 billion from mid-May until late-July when it finally broke the $280 billion resistance.

Although it is yet to be seen if the recent total market capitalization will hold the $360 billion level, the current 10-day average volume is an indicator of a healthy market trend. 

There seems to be no signal of stress both in Bitcoin futures and options, as both perpetual contract funding and implied volatility indicators remain healthy.

While there is not a single indicator or analysis that provides certainty over short-term price movements, the net exposure of top traders points to unfazed bullish momentum.

By avoiding excessive leverage, traders will not be heavily impacted by natural price swings that will occur even during long and unquestionably bullish markets. 

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.





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Athena confirms plans to bring 1500 Bitcoin ATMs to El Salvador

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U.S. company Athena intends to supply El Salvador’s new crypto-based economy with 1500 Bitcoin ATMs, a company representative has confirmed.

The rollout will start small, trialing a few dozen machines to establish a business model. The Chicago headquartered firm plans to invest more than $1 million to install cryptocurrency ATMs, targeting regions where residents receive remittances from abroad.

Along with installing the new machines it will also hire staff and open an office to carry out operations in El Salvador.

Athena currently operates just two ATMs of this type in El Salvador, one at El Zonte beach as part of an experiment called “Bitcoin Beach” aimed at making the town one of the world’s first crypto economies, and the other in El Tunco, according to CNN.

Athena’s director for Latin America, Matias Goldenhörn, told Reuters that Salvadorian President Nayib Bukele had “presented us with a tough challenge of 1,500 ATMs, we will go for that, but in phases. We are a private company and we want to ensure that our development in the country is sustainable.”

On June 17, Athena posted about its plans to expand in the country in the wake of lawmakers passing a bill to make Bitcoin legal tender. The company tagged President Bukele asking if a thousand machines would be enough. He responded he had set his target on a larger figure.

Goldenhörn stated that the business model is likely to be different from that in the U.S., which currently has a total of 19,325 BTC ATMs according to Coinatmradar.

“Initially we are going to bring dozens of machines, (we’ll) test what the business model is like in El Salvador, which will probably be different than in the United States,”

Related: Athena Bitcoin installs the first Bitcoin ATM that operates with dollars in Argentina

El Salvador’s Bitcoin adoption plan has already experienced pushback from the World Bank, which refused to assist the country in its transition, citing “the environmental and transparency shortcomings” associated with the digital asset.

On June 22, Cointelegraph reported that an opposing political party filed a lawsuit alleging the new Bitcoin law could be unconstitutional and harmful to the country.





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PlanB feeling ‘uneasy’ as 41% of his followers tip $100K BTC won’t happen this year

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PlanB, the brainchild behind the Bitcoin stock-to-flow model, has revealed he is feeling “uneasy” about his renowned price predictions due to the recent downtrend in markets.

The stock-to-flow (S2F) model, which has predicted BTC prices with some degree of accuracy over the past two years, has been called into question by some of his followers in a recent Twitter poll.

The anonymous analyst surveyed his followers on June 21 asking them what price they thought BTC would reach by the end of the year. He used the results to compare them to a similar survey in March when market sentiment was overwhelmingly bullish.

Of the 124,595 respondents to the latest poll, 41% thought that BTC prices would remain below $100K by the end of the year, which would invalidate the S2F model. That’s two and a half times the 16% in the previous poll who thought the lazer eyes crowd would be disappointed this year.

PlanB who originally published the price predictor in March 2019, pinned a message admitting that even he feels a little “uneasy” when BTC prices deviate from the model. However, the analyst noted that the model had managed to hold previously in March 2019, again in March 2020 when the pandemic caused a global market meltdown, and once more in September 2020.

Preston Pysh, the founder of The Investors Podcast Network, commented that it was difficult for a model to account for a blizzard of bad news that has accelerated the market downturn.

“You mean your model doesn’t account for 40%+ of mining rigs getting banned & forced to turn-off & relocate to various parts of the world…and with no forward notice to companies/entitles for the extraordinary expense to their heavily denominated BTC treasuries/retained earnings.”

The model is a calculation of a ratio based on the existing supply of Bitcoin against how much is entering circulation. The scarcer the asset becomes due to the four-year halving cycles the higher the price. PlanB’s model predicts an average price of $288K over the next three years.

Related: $288K BTC price ‘still in play’ says PlanB as Bloomberg champions Bitcoin halving

At the time of writing, Bitcoin had gained 2.9% over the past 24 hours to trade at $34,450 according to CoinGecko. The asset is currently 45% down from its all-time high of $64,800 on April 14.





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Bitcoin in uptrend but BTC may never beat gold’s $10T market cap — ex-NYSE head

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Bitcoin (BTC) is on a “lower left to upper right trend” and its volatility should not scare investors, the former head of the New York Stock Exchange says.

In an interview with CNBC on June 23, Thomas Farley revealed long-term convictions about Bitcoin and dismissed concerns over BTC price losses.

Bitcoin: Going up, but not “up only”

Coming a day after CNBC pundit Jim Cramer admitted that he sold his Bitcoin stash, suggesting that BTC/USD was going as low as $10,000, Farley provided some much-needed mainstream bullishness.

“With respect to the recent price moves, I’m kind of sanguine about them — Bitcoin’s a very volatile asset class, in part because it’s a new asset class,” he told the network.

“I have no doubt it’ll go up, it’ll go down over the long term — I still think it’s a lower left to upper right trend and I think we’re going to see that play out over five years.”

With mining upheaval coming from China still on everyone’s lips, popular mainstream criticism of Bitcoin’s energy usage was also swiftly cast aside as a temporary issue.

“I think this kerfuffle is an interesting conversation, but by and large I think it’ll be resolved because I think the blockchain at its core adds to its efficiency and in fact will add to energy efficiency over time,” he continued.

Less convinced on gold. vs. Bitcoin

When it comes to Bitcoin as “digital gold,” however, Farley was more conservative in his predictions.

Now firmly beneath a trillion-dollar market cap, Bitcoin must transform in order to take on store-of-value safe-havens.

Related: Joining the ranks: Bitcoin’s correlation with gold and stocks is growing

“I think the upper bound for now is gold, which is about a $10 trillion market cap,” he added.

“In order for Bitcoin to one day exceed gold, it’ll have to be more of an accepted form of currency — I’m not sure, frankly, if it ever gets there.”

Proponents argue that Bitcoin, by its very nature, faces just a matter of time before eclipsing gold thanks to the latter’s ultimately infinite supply and inability to beat Bitcoin in all aspects of “money.”

The precious metal saw a major sell-off last week after comments on policy from the United States Federal Reserve.

To beat gold, Bitcoin would need to trade at more than $533,000 with the current supply.