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Top Bitcoin Expert Claims “The Train Has Left The Station” With $14K Broken

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Bitcoin price is now trading at just under $15,000, less than 24 hours after resistance at $14,000 was broken. One of the cryptocurrency’s top fundamental experts, says that this is just the beginning, now that “the train has left the station.”

Breaking through resistance at $14,000 could ultimately cause the first-ever cryptocurrency to continue to pick up momentum like a locomotive, and steam toward a new all-time high. 

Crypto Expert Charles Edwards: The Bitcoin Train “Has Left The Station”

In 2020 alone, Bitcoin has risen from a $3,800 low on Black Thursday, to a current high of just below $15,000 in around nine months. However, that was just the first stop, according to Bitcoin expert Charles Edwards.

Although $10,000 was critical resistance for the cryptocurrency, $14,000 might be the nail in the coffin for the bear market finally. The bearish resistance block that Bitcoin has now cleared, stemmed from as far back as 2017, only a week or so after the crypto asset set its peak at around $20,000.

The breakout through $14,000 has caused the train to leave the station | Source: BTCUSD on TradingView.com

Bitcoin broke above $14,000 yesterday, and in a flash raced to $15,000, where it has met another level of resistance. But “the train has left the station” already, according to Edwards, who believes that the crypto asset’s next bull market is beginning.

Edwards knows his stuff, admittedly. He’s the creator of some of the most effective network health measuring tools, including the hash ribbons, Bitcoin energy value, and the cost of production indicator on TradingView.

Recently, his hash ribbons tool signaled that miners were capitulating, however, warned it wasn’t a sell signal. He was right, as Bitcoin has only exploded further since by well over 6% and climbing.

bitcoin 14000

Similar levels acted as the last stop before the bull run | Source: BTCUSD on TradingView.com

Why Was $14,000 So Critical To The Bull Run: Adding Up The Math

As for why $14,000 was such a key level, and why Edwards says it was the last stop for the Bitcoin accumulation train before the bull market, it could be all due to math and the mind.

The chart above shows how the same level acted as the last stop for Bitcoin price during the previous bear market before the bull run began. But removing the resistance blocks, and replacing them instead with Fibonacci retracement, sheds light onto why resistance there is so critical.

bitcoin 618

Each major resistance level also happened to be the 0.618 Fib level | Source: BTCUSD on TradingView.com

The level just so happens to be the 0.618 Fibonacci retracement level, and a crucial level to watch for where reversals to take place. It is not clear why this relationship exists, but when assets breach through this line, its signal that continuation is likely – which is exactly what Edwards suggests will happen, and what Bitcoin is doing as this text is typed.

With Fibonacci levels so clearly important, it may be worth paying close attention to the 19.618 Fibonacci level, which acted as the peak during 2017 – interestingly enough – at roughly $19,618 on BitStamp.

Featured image from Deposit Photos, Charts from TradingView.com





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Bitcoin derivatives data shows pro traders ignored today’s $41K pump

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Sometimes all Bitcoin (BTC) needs to pump 10% is a positive remark from someone like Elon Musk.

The Tesla CEO has been pointed to as the culprit for the recent downturn after the company’s May 12 announcement explaining that it would no longer accept Bitcoin payments due to environmental concerns. Musk followed up by saying that he was looking into other cryptocurrencies that required 99% less energy consumption. 

However, on June 13, the situation reversed as Musk reassured the public that Tesla did not sell any additional Bitcoin. The post also said that the electric-car producer would resume taking BTC payments as soon as its Bitcoin mining relied on a minimum of 50% clean energy.

In bear markets, top traders act with caution

While retail investors and algorithmic trading bots jump into action as soon as bullish or bearish signals and news flash, top traders tend to act more with more caution. Those who have been around the crypto markets long enough know that positive news might end up being ignored or severely downplayed in bear markets.

On the other hand, even potentially negative news seems to have little to no impact during bull runs. For example, on Sept. 26, 2020, Kucoin was hacked for $150 million. The following week, on Oct. 1, the United States Commodity Futures Trading Commission charged BitMEX for operating an unregistered trading platform and violating Anti-Money Laundering regulations.

Two weeks later, police reportedly questioned the founder of OKEx, forcing the exchange to suspend crypto withdrawals. Had this series of negative news happened while Bitcoin was flat or in a bearish phase, the price would have undoubtedly have stalled during a bear market.

Bitcoin price at Coinbase in USD, Sept. 2020. Source: TradingView

As shown above, Bitcoin barely had any negative impact in late September and October 2020. In fact, by the end of November 2020, Bitcoin was up 74% in two months. This is the main reason why top traders tend to ignore positive news during bear markets and vice-versa.

The 3-month futures premium is neutral

A futures contract seller will usually demand a price premium to regular spot exchanges. This situation is not exclusive to crypto markets and happens in every derivatives market because in addition to the exchange liquidity risk, the seller is postponing settlement and this results in a higher price.

The 3-month futures premium (basis rate) usually trades at a 5% to 15% annualized premium in healthy markets. When futures are trading below the regular spot exchange price, it signals a short-term bearish sentiment.

Huobi 3-month Bitcoin futures basis. Source: Skew

As shown above, the future basis has been below 11% since May 20 and flirting with bearish territory on multiple occasions as it tested 5%. The current level indicates a neutral position from top traders.

The options skew is no longer signaling fear

The 25% delta skew compares similar call (buy) and put (sell) options side-by-side. It will turn positive when the protective put options premium is higher than similar risk call options.

The opposite holds when market makers are bullish and this causes the 25% delta skew indicator to enter the negative range.

Deribit Bitcoin options 25% delta skew. Source: laevitas.ch

The above chart confirms that top traders, including arbitrage desks and market markers, are currently uncomfortable with Bitcoin price as the neutral-to-bearish put options premium is higher. However, the current 7% positive skew is far from the 20% exaggerated fear seen in late May.

Derivatives markets show no evidence of top traders getting excited about the recent $40,000 hike. On the bright side, there is room for leverage buyers to mount positions. Stronger upswings usually occur when investors are least expecting, and the current scenario seems to be a perfect example.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.