Značka: Inflation

What is the economic impact of cryptocurrencies?

Although the cryptocurrency market appears to grow in a positive feedback loop, that does not mean that (un)expected events may not impact the trajectory of the ecosystem as a whole.  Although blockchain and cryptocurrencies are fundamentally meant as ‘trustless’ technologies, trust remains key there where humans interact with one another. The cryptocurrency market is not only impacted by the broader economy, but it may also generate profound effects by itself. Indeed, the Terra case shows that any entity — were it a single company, a venture capital firm or a project issuing an algorithmic stablecoin — can potentially set into motion or contribute to a “boom” or “bust” of the cryptocurrency markets.  The impact of such crypto-native events with systemic impact mirroring traditional finance domino effects, and the consequential falls of Celsius and Three Arrows Capital, all indicate that the crypto-economy is not immune to failures. Indeed, while traditional finance has institutions that are too big to fail, the crypto sector does not. Looking in retrospect is always easy, but the Terra project was fundamentally flawed and unsustainable over time. Nevertheless, its downfall had a systemic impact as many projects, venture capital and standing companies were exposed and heavily impacted. It indicates that investing in cryptocurrencies is all about thinking about risks and potential rewards.  The fall and domino effect across the board indicate the lack of maturity of the very sector itself.  Since innovation and prices are inherently connected and the early-stage development of the crypto-economy offers lots of untapped potential, the said economy may continue to see events that temporarily undermine growth.  Yet, many working in the sector have a “trustless” conviction that strong projects will keep up during temporary corrections and that the cryptocurrency winter will clean up the path for a cycle of unlimited, novel disruptive innovation. Purchase a licence for this article. Powered by SharpShark.

Čítaj viac

Bitcoin price due 'big dump' after passing $20K, warns trader

Bitcoin (BTC) returned to intraday resistance on Sep. 30 as analysis predicted that $20,000 could break before a new comedown.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewCrunch time for $20,000Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it circled $19,600 at the time of writing.The pair had seen a bout of more volatile behavior the day prior, briefly losing $19,000 before bid support took the market higher.The day looked to be an important one for bulls, with the monthly close combining with European Consumer Price Index (CPI) data. Geopolitical events involving Russia’s official annexation of Ukrainian territory and associated implications were also on traders’ radar. Russian president Vladimir Putin was expected to speak at a ceremony during which he would formally ratify four Ukrainian regions joining Russia.“Today is the day,” Il Capo of Crypto declared, referencing Bitcoin’s next squeeze higher which should turn to losses thereafter.He continued that the price action would likely take the form of a “pump to 20000-20500 before Putin’s speech. Then big dump.”In a potentially more optimistic take, market analysis outfit IncomeSharks argued that bears had recently become less confident shorting BTC.“Bitcoin selling pressure has slowed a lot,” it told Twitter followers on Sep. 29. “It’s amazing how quickly we can see moves up now. It use to feel like it was weighted down. Now it feels like the wind blows and it moves. Bears seem a little more cautious shorting, a shift from the euohoria they were experiencing.”On the day, meanwhile, IncomeSharks noted that United States equities futures were gathering upside momentum, allowing for price relief across correlated crypto markets.“$SPX futures pushing up. Markets have flip flopped almost every other day this week. Bulls holding support with strength,” it summarized.S&P 500 futures 1-hour candle chart. Source: TradingViewGrim day for European economic dataIn Europe, the picture was less enticing, as CPI readings for Eurozone member states made for eye-watering reading.Related: Bitcoin ‘great detox’ could trigger a BTC price drop to $12K: ResearchGerman CPI came out at the highest ever recorded at 10%, reaching double figures for the first time since World War II, markets commentator Holger Zschaepitz noted.Eurozone combined inflation data for September was due for release on the day but still expected at the time of writing. The figures will cap a tumultuous week for Europe, which saw the Bank of England return to quantitative easing (QE) by buying bonds to avert a meltdown in the United Kingdom.For Bitcoiners responding, it was only a matter of time before other central banks followed suit. “A virus starts in one host and moves on quickly to the next,” Arthur Hayes, ex-CEO of derivatives trading platform BitMEX, wrote at the time. “YCC coming to a local pub near you. All central bankers think and act alike. If it’s happening in the UK, your banana republic is next. $BTC is Lord Satoshi’s cure.”Hayes referenced the yield curve control, or YCC, policy tool used by central banks, something he believes will also become inevitable in the future.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.

Čítaj viac

US Treasury yields are soaring, but what does it mean for markets and crypto?

Across all tradeable markets and currencies, U.S. Treasuries — government bonds — have significant influence. In finance, any risk measurement is relative, meaning, if one insures a house, the maximum liability is set in some form of money. Similarly, if a loan is taken from a bank, the creditor has to calculate the odds of the money not being returned and the risk of the amount being devalued by inflation.In a worst-case scenario, let’s imagine what would happen to the costs associated with issuing debt if the U.S. government temporarily suspended payments to specific regions or countries. Currently, there is over $7.6 trillion worth of bonds held by foreign entities and multiple banks and governments depend on this cash flow.The potential cascading effect from countries and financial institutions would immediately impact their ability to settle imports and exports, leading to further carnage in the lending markets because every participant will rush to reduce risk exposure. There are over $24 trillion in U.S. Treasuries held by the general public, so participants generally assume that the lowest risk in existence is a government-backed debt title.Treasury yield is nominal, so mind the inflationThe yield that is widely covered by the media is not what professional investors trade, because each bond has its own price. However, based on the contract maturity, traders can calculate the equivalent annualized yield, making it easier for the general public to understand the benefit of holding bonds. For example, buying the U.S. 10-year Treasury at 90 entices the owner with an equivalent 4% yield until the contract matures.U.S. Government Bonds 10-year yield. Source: TradingViewIf the investor thinks that the inflation will not be contained anytime soon, the tendency is for those participants to demand a higher yield when trading the 10-year bond. On the other hand, if other governments are running the risk of becoming insolvent or hyperinflating their currencies, odds are those investors will seek shelter in U.S. Treasuries.A delicate balance allows the U.S. government bonds to trade lower than competing assets and even run below the expected inflation. Although inconceivable a few years ago, negative yields became quite common after central banks slashed interest rates to zero to boost their economies in 2020 and 2021.Investors are paying for the privilege of having the security of government-backed bonds instead of facing the risk from bank deposits. As crazy as it might sound, over $2.5 trillion worth of negative-yield bonds still exist, which does not consider the inflation impact.Regular bonds are pricing higher inflationTo understand how disconnected from reality the U.S. government bond has become, one needs to realize that the 3-year note’s yield stands at 4.38%. Meanwhile, consumer inflation is running at 8.3%, so either investors think the Federal Reserve will successfully ease the metric, or they are willing to lose purchasing power in exchange for the lowest risk asset in the world.In modern history, the U.S. has never defaulted on its debt. In simple terms, the debt ceiling is a self-imposed limit. Thus, the Congress decides how much debt the federal government can issue.As a comparison, an HSBC Holdings bond maturing in August 2025 is trading at a 5.90% yield. Essentially, one should not interpret the U.S. Treasury yields as a reliable indicator for inflation expectation. Moreover, the fact that it reached the highest level since 2008 holds less significance because data shows investors are willing to sacrifice earnings for the security of owning the lowest risk asset.Consequently, the U.S. Treasury yields are a great instrument to measure against other countries and corporate debt, but not in absolute terms. Those government bonds will reflect inflation expectations, but could also be severely capped if the generalized risk on other issuers increases.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.

Čítaj viac

Is it Bitcoin’s time to shine? British pound drops to all-time low against the dollar

On Sept. 26, the British pound hit a record low against the U.S. dollar following the announcement of tax cuts and further debt increases to curb the impact of a possible economic recession. The volatility simply reflects investors’ doubts about the government’s capacity to withstand the growing costs of living across the region.The U.S. dollar has been the clear winner as investors seek shelter in the largest global economy, but the British pound’s weakness could be a net positive for Bitcoin. The GBP, or British pound, is the world’s oldest currency still in use and it has been in continuous use since its inception.Fiat currencies are a 52-year old experimentThe British pound, as we currently know, started its journey in 1971 after its convertibility with gold or theequivalent was effectively terminated. Since then, the currency issued by the Bank of England has not had a fixed valuation.Inflation has been the centerpiece of economic debates all throughout 2022 after central banks added liquidity to the markets over the previous two years to stimulate economies. As a result, in August 2022, the United Kingdom saw a 9.9% increase in consumer prices versus the previous year. On Sept. 22, the government announced an unprecedented tax cut, the highest since 1972, causing the British pound to reach an intraday low of $1.038 versus the U.S. dollar on Sept. 26. Analysts concluded that government bond issuance would increase to pay for the lesser tax, and interest rates would have to be aggressively increased. While the GBP’s loss of value is shocking, one must analyze exactly how important is the global currencies market, and how relevant is the British pound to cryptocurrencies. The first part is relatively easy to answer, but it depends on whether or bank deposits, savings and certificates of deposits are accounted for. If we stick to the base money definition, exclusively measuring circulating cash and deposits at the central bank, the pound sterling stood at GBP 1.05 trillion in June 2022.In U.S. dollar terms, the U.K. currency represents $1.11 trillion out of the global $28.2 trillion in fiat base money, or roughly 4%. On the other hand, the euro, the unified currency of the eurozone nations, leads the ranking with $6 trillion, closely followed by the U.S. dollar with $5.5 trillion. Hence, the significance of the GBP remains high, backed by the region’s $3.19 trillion gross domestic product in 2021, the fifth largest in the world.In October 1990, the British government decided to pair the GBP based on the Deutsche Mark because Germany was the leading economic force in the region. However, the country was forced to withdraw from the pairing in September 1992 after Britain’s lackluster financial performance made the exchange rate unsustainable. As a result, during “Black Wednesday,” the interest rates suddenly increased from 10% to 15%, and the GBP currency devalued by 25% overnight.Related: GBP follows euro; The pound-dollar rate hits all-time lowSupply caps and scarcity could give crypto a chance to shineVery few assets can compete with fiat money in terms of relevance. Gold has roughly $6 trillion in value, excluding jewelry and non-financial assets, is a definite contender. The tech giant, Apple, also leads the stock market valuation with a $2.45 trillion capitalization, followed by oil producer Saudi Aramco, which is at $2 trillion.Estimating the relevance of the British pound on cryptocurrencies is not simple, but according to data from Nomics, out of the global Bitcoin fiat trading, the U.S. dollar is the absolute leader with 89%, followed by 4% from the Japanese yen, 3% for the euro and 2% for the sterling. Consequently, the direct impact on Bitcoin trading seems relatively small, but the fact that the oldest fiat currency reached an all-time low against the U.S. dollar could be a game-changer for cryptocurrencies. According to Porkopolis Economics, the average issuance rate of the pound sterling since 1970 has been 11.2% per year. This figure directly compares to Bitcoin’s issuance of 900 coins daily or 1.7% yearly.Once the general population realizes their savings and investments are being devalued more aggressively by central bank stimulus measures, the benefits of a decentralized form of money could become clear. But, for now, the U.S. dollar has been the clear winner, reaching its highest level in over 20 years compared to other major global fiat currencies.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.

Čítaj viac

'The bond market bubble has burst' — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts a new week staring down a wild macro environment after sealing its lowest weekly close in nearly two years.As risk assets across the global economy take a hammering and the U.S. dollar surges, the largest cryptocurrency is on a limp footing.September, having started out on bulls’ side, is now living up to its informal crypto market nickname — “Septembear” — and BTC/USD is currently down 6.2% since the start of the month.The bad news keeps coming for hodlers, who are clinging to dormant coins in increasing numbers as the dollar runs rampant and mainstream appetite to diversify into riskier plays continues to evaporate.With macro set to remain the key focus for everyone this week, Cointelegraph takes a look at what might lie in store for BTC price action.In economic conditions that rival any major period of historical upheaval seen in the past century or more, here are some factors to take into account when assessing where Bitcoin could head next.Weekly close sends BTC/USD back to November 2020While not matching the previous week’s losses (3.1% versus 11%), the past seven days nonetheless managed to spark Bitcoin’s lowest weekly close since November 2020, data from Cointelegraph Markets Pro and TradingView shows.As the downside keeps coming, Bitcoin has thus turned back the clock to before the breakout, which took it beyond its prior halving cycle’s all-time high.BTC/USD 1-week candle chart (Bitstamp). Source: TradingViewThe sense of deja vu is unwelcome to the average hodler — the vast majority buying and cold storing over the past two years is now underwater.“$BTC just made the lowest weekly close in this zone,” popular Twitter analyst SB Investments summarized after the close. “Looks bearish with stocks looking to break support as well. But on the other side this is what everyone expects.”Whether the markets could pull a surprise “max pain” move to the upside, liquidating short bias, is a key alternative argument for Bitcoiners. For popular trader Omz, the weekly close price of $18,800 even represents a convincing local bottom.The RSI divergence has not gone unnoticed elsewhere, with trader JACKIS flagging its arrival last week.“We only got two touches of the oversold territory in the past & they have always marked the exact bottom as well,” he tweeted at the time.Fellow trading account IncomeSharks also maintained that a reversal could accompany the U.S. midterm elections in early November, but stopped short of saying that the bottom was in.“Elevator down, stairs up,” it commented on the 4-hour chart on the day. “Keep on building double bottoms and new supports, Midterm Rally remains on the table. Break this structure, remove these targets, and find a new bottom.”BTC/USD 4-hour candle chart (Bitstamp). Source: TradingViewDollar wrecking ball costs stocks, fiatMonday has barely started and the turmoil that accompanied last week is already back with a vengeance on macro markets.An unstoppable U.S. dollar is laying waste to key trading partner currencies, with the Bitcoin pound sterling making headlines on the day as it plunges 5% to come within a few percentage points of USD parity — its lowest levels against the greenback ever.GBP/USD would follow the euro becoming worth less than $1, while the misery forced Japanese authorities to prop up the yen exchange rate artificially last week.GBP/USD 1-day candle chart. Source: TradingViewEUR/USD briefly fell below $0.96 before a modest rebound, while USD/JPY remains near its highest since the 1990s despite Japan’s intervention.At the same time, alarm bells are sounding for global bonds, which have fallen back to 2020 levels. Markets commentator Holger Zschaepitz warned alongside Bloomberg data:“Looks like the bond market bubble has burst. The value of global bonds has plunged by another $1.2tn this week, bringing the total loss from ATH to $12.2tn.” Stocks are set to fare no better, with futures down on the day prior to the Wall Street open. Brent crude oil fell below $85 per barrel for the first time since the start of 2022.“Global bonds are collapsing in their fiat currencies, which are collapsing against the dollar, which is fast losing purchasing power,” Saifedean Ammous, author of the popular books, “The Bitcoin Standard” and “The Fiat Standard,” reacted. “It will be months & years before the average fiat user realizes just how much they’re getting ruined financially. The ‘new normal’ is poverty.”With crypto still highly correlated with stocks and inversely correlated against dollar strength, the outlook for Bitcoin is thus less than positive as the status quo looks set to remain.Euro Area Consumer Price Index (CPI) is due this week, expected to show inflation still increasing, while the U.S. Personal Consumption Expenditures Price Index (PCE) print should conversely continue the U.S. downtrend which began in July.The U.S. dollar index (DXY) meanwhile shows no sign of reversing, now at its highest since May 2002.U.S. dollar index (DXY) 1-month candle chart. Source: TradingViewHodlers in classic bear market modeAmid such mayhem, it comes as no surprise that Bitcoin hodlers’ conviction is increasing and long-term investors refuse to sell.Stubborn hodling is a hallmark of Bitcoin bear markets, and the latest data shows that that mindset is firmly back this year. According to on-chain analytics firm Glassnode, Bitcoin’s so-called Coin Days Destroyed (CDD) metric is setting new lows.CDD refers to how many dormant days are erased when BTC leaves its host wallet after a given period. When CDD is high, it suggests that more long-term stored coins are now on the move.“The total volume of Bitcoin coin-days destroyed in the last 90-days has, effectively, reached an all-time-low,” Glassnode commented. “This indicates that coins which have been HODLed for several months to years are the most dormant they have ever been.”Bitcoin 90-day Coin Days Destroyed (CDD) annotated chart. Source: Glassnode/ TwitterThe news follows weeks of various hodl-focused metrics showing a commitment to keep the BTC supply under lock and key for better days.Glassnode meanwhile additionally noted the increasing prevalence of coins hodled for at least three months as a proportion of the USD value of the BTC supply.“Bitcoin HODLers appear to be steadfast and unwavering in their conviction,” it agreed. An accompanying chart showed Bitcoin’s HODL Waves metric — a depiction of the supply broken down by coin dormancy.Bitcoin HODL Waves annotated chart. Source: Glassnode/ TwitterWhales still dictate support and resistanceWhile old hands walk away from the “sell” button, Bitcoin’s largest-volume investors are on the radar of analysts when it comes to spot price moves.The current trading range represents a zone of interest due to the extent of trading activity involving whale money in the past.Large buys lend additional weight to a specific support price while the same is true of resistance levels, and according to on-chain monitoring resource Whalemap, BTC/USD is currently stuck between the two.“Holding 19k-18k is key for $BTC,” the Whalemap team summarized late last week.An accompanying chart showed whale resistance levels capping relief for Bitcoin and limiting it to within the $20,000 zone.Bitcoin whale resistance annotated chart. Source: Whalemap/ TwitterNonetheless, separate figures from research firm Santiment confirm that whales’ BTC exposure overall has fallen to two-year lows.Bitcoin whale ownership annotated chart. Source: Santiment/ Twitter”Extreme fear” enters second weekIn a familiar return to 2022 norms, crypto market sentiment has now been in “extreme fear” mode for more than a week.Related: 5 altcoins that could turn bullish if Bitcoin price stabilizesAs per the Crypto Fear & Greed Index, which measures aggregate crypto market sentiment, the average investor could not feel much more uneasy about the outlook.As of Sep. 26, Fear & Greed recorded a score of 21/100, with 25/100 the boundary for “extreme fear.Cold feet is nothing new to the market this year, which saw its longest-ever stint in “extreme fear” at over two months.Crypto Fear & Greed Index (screenshot). Source: Alternative.meA potential silver lining could lie in social media interest, which saw a rebound over the weekend, Santiment noted.”Among crypto’s top 100 assets, $BTC is the topic in 26%+ of discussions for the first time since mid-July,” it revealed in part of Twitter comments this week. “Our backtesting shows 20%+ dedicated to Bitcoin is a positive for the sector.”Bitcoin social dominance annotated chart. Source: Santiment/ TwitterThe 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.

Čítaj viac

Jerome Powell is prolonging our economic agony

Can we all agree that the Federal Reserve has a plan to combat runaway inflation? They do. Chair Jerome Powell has all but admitted it. After tempering his comments before previous rate hikes, allowing wiggle room which gave way to market rebounds, Powell has left no bones about this one. It is necessary to wreak some havoc on the economy and put downward pressure on the labor markets and wage increases to stop the creep of inflation. Whether you buy into that logic or if you believe — like Elon Musk — that such movements could result in deflation — doesn’t matter.All that matters is what those voting on the rate hikes believe, and there’s plenty of evidence that they won’t stop until the rate is over 4%. Wednesday’s rate increase of 75 basis points only moves us in that direction. This is the third such adjustment of 75 basis points, and we’ve been all but told that it wouldn’t be the last. While these rate hikes have been historical, they prolong the economic pain associated with them. It’s time for the Fed to be brutally honest about where the economy is and where it is heading.Jerome Powell has said that he aims to give the economy a soft landing. However, he’s also said, “Our responsibility to deliver price stability is unconditional.”Except that the soft landing he’d like to attain is something from a science fiction novel. It is something that those following the situation don’t believe. Former Federal Reserve Bank of New York President William Dudley admitted as much, saying, “They’re going to try to avoid recession. They’re going to try to achieve a soft landing. The problem is that the room to do that is virtually non-existent at this point.”Related: The market isn’t surging anytime soon — so get used to dark timesCleveland Federal Reserve Bank President Loretta Mester, one of the 12 who voted on the rate hike, has joined Powell, stating that the Fed will need to raise the rate to over 4% and hold it there. Only one question remains, and it isn’t where the interest rate will end up. The question: Why does the Fed insist on dragging out the pain?There’s no question that a rate hike of 150 basis points would genuinely shake up the market. So, too, does a 75-basis point hike with a promise of more to come. There’s an advantage to taking the plunge all at one time. Done once, Powell could’ve come out and clearly articulated a path forward. He could have assured Wall Street, citizens and trading partners across the globe that the 150-basis point hike is the magic bullet needed to bring down inflation and that any other movement would be of inches rather than miles. Instead, Powell noted at his Wednesday press conference that an additional 100 or 125 basis points in increases would be required by the end of the year.Federal Funds Effective Rate from 2010 through August 2022. Source: Federal Reserve Bank of St. LouisAs with most changes, clear communication is the most important element to get buy-in. Right now, traders feel betrayed. In the beginning, Fed forecasts indicated that a 75-point hike was historic and unlikely to be replicated. Yet, inflation persists. In the long run, an honest approach would create more upheaval on the front end, allowing the healing to begin much faster.A Brookings Institution study, Understanding U.S. Inflation During the COVID Era, reached an unsurprising conclusion: The Fed “likely will need to push unemployment far higher than its 4.1 percent projection if it is to succeed in bringing inflation down to its 2 percent target by the end of 2024.”to be clear, we should have gotten 100 bps if the Fed wanted to show it was serious75 bps is for political appeasement because JPow doesn’t to drop the hammer before electionsand any lower would have been a farce https://t.co/mth8qlGOif— DCinvestor.eth ⌐◨-◨ (@iamDCinvestor) September 21, 2022The Fed has kept interest rates at historic lows for over a decade. Investors, companies and society have begun operating as if near-zero rates would serve as the norm. Understandably, this rapid departure from the norm has rattled markets. And implications extend far beyond the markets. The implications such increases have for the national debt are even more excruciating.However, the increases are coming. There’s no question about that. To continue the charade that 75 basis points, and some number of similar additional increases, is somehow more palatable because the markets don’t feel it all at one time is sheer poppycock. The markets, as well as investors, deserve to know the truth. Equally importantly, society deserves to begin the path to recovery. We could’ve started this morning. Instead, it will be in the months to come.Related: What will drive crypto’s likely 2024 bull run?As it relates to cryptocurrency, the rate hike shouldn’t change the trend compared to traditional assets. Any hit to the market will affect digital and traditional assets alike. For another bull market to emerge, regulatory reform will be required. That won’t happen until at least next year. The sooner the Fed reaches its magic number, the faster that economic healing will start. In that way, the crypto community should favor an expedited timeline. Rip the band-aid off and allow healing to begin while regulatory guidelines are negotiated. Then, crypto will be in a position where it may again blossom.Richard Gardner is the CEO of Modulus, which builds technology for institutions that include NASA, Nasdaq, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Microsoft, Cornell University and the University of Chicago.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Čítaj viac

Bitcoin, Ethereum and altcoins hold intraday gains after Fed hikes interest rates by 0.75%

Bitcoin (BTC) retreated and reversed its intraday gains after the Federal Reserve announced its third consecutive 75 basis point (bps) interest rate rise on Sep. 21.Traders sold the newsBTC’s price dropped circa 6.5% from its intraday high of $19,950, hitting $18,660 minutes after the Federal Open Market Committee’s statement. Its decline mirrored a similar sudden correction in the U.S. stock market, with the benchmark S&P 500 dropping 0.5% minutes after the Fed update.BTC/USD daily price chart. Source: TradingViewOn the other hand, the 10-year U.S. Treasury note yield surged to 3.6% after the Fed’s announcement versus 3.56% five minutes before it. Similarly, the yield on the 2-year Treasury note climbed from 3.98% to 4% in the same timeframe.The U.S. dollar index (DXY), which measures the greenback’s strength against a basket of top foreign currencies, surged to 111.57 for the first time in 20 years.The Fed also published an updated “dot plot” which complied its officials’ individual interest rate projections by the end of 2025. These forecasts signaled additional rate hikes in the future, with the 2022 target sitting at 4.4% and 2023 targeting 4.6%.The central bank officials also predicted that the policy rate would peak at 4.6% in 2023. Thereafter, it would decline to 3.9% in 2024, followed by another drop to 2.9% in 2025.All the metrics point to more pain for BitcoinThe dollar’s rise and Bitcoin’s fall after the Fed update reflected investors’ growing appetite for cash and cash-based instruments compared to riskier assets. Meanwhile, the central bank’s dot plot hinted that investor sentiment would remain unchanged until the end of 2023.Related: Bitcoin ‘nuke’ warning as Fed rate hike decision looms — Dollar index hits 20-year highBitcoin price could continue to suffer due to the Fed’s hawkish stance and its attempts to bring inflation down from its current 8.3% level. After the central bank update, many analysts noted that BTC’s price could break below its current technical support range of $18,000-20,000, given that the Fed could raise rates by another 75 bps before the close of the year.I really don’t know how much longer this $BTC support can hold pic.twitter.com/YAdkkB9Zww— CRG (@MacroCRG) September 20, 2022Bitcoin’s technical outlook appeared similarly bearish. Notably, the cryptocurrency has been forming a bearish reversal pattern dubbed the “head-and-shoulders,” whose profit target sits around $14,000, as illustrated below.BTC/USD daily price chart. Source: TradingViewConversely, a rebound from the head-and-shoulders support level of $18,800 could have Bitcoin eye $22,500 as its interim upside target.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.

Čítaj viac

Bitcoin 'nuke' warning as Fed rate hike decision looms — dollar index hits 20-year high

Bitcoin (BTC) underwent a weak rebound on Sep. 21, and the U.S. dollar jumped to a new yearly high as investors await today’s Federal Open Market Committee’s interest rate decision.BTC price hold $19K ahead of Fed decisionBTC’s price has managed to cling on to $19,000 with a modest daily gain of 1.33% . Meanwhile, the U.S. dollar index (DXY), which measures the greenback’s strength versus a pool of top foreign currencies, rose to 110.86, the highest level in twenty years.BTC/USD vs. DXY daily price chart. Source: TradingViewFOMC rate hike scenariosThe Federal Reserve is poised to discuss how far it could raise its benchmark lending rates to curb record inflation. Interestingly, the market expects the U.S. central bank to hike rates by 75 or 100 basis points (bps).The ramification of higher interest rates will likely result in lower appetite for riskier assets like stocks and cryptocurrencies. Conversely, the U.S. dollar will serve as the go-to safe haven for investors escaping risk-on assets.”There seems no reason for the Fed to soften the hawkishness shown at the recent Jackson Hole symposium, and a [0.75 percentage point] ‘hawkish hike’ should keep the dollar near its highs of the year,” analysts at ING told the Financial Times.Independent market analyst PostyXBT argues that a 100 bps rate can “nuke” Bitcoin below its current technical support of $18,800. He also suggests that BTC has a good chance of recovery if the rate hike turns out to be lower than expected, or 50 bps.$BTC 1DAs us FOMC experts would know, today is a big day!100bps likely nukes support for good?50bps likely pumps and gives bulls some breathing room?Going to be a very interesting daily close https://t.co/C5ClM436N6 pic.twitter.com/mJP7qpGEv1— Posty (@PostyXBT) September 21, 2022These speculations echo general rate hike expectations. John Kicklighter, the chief strategist at DailyFX, notes that a 50 bps rate hike would be bullish for the U.S. benchmark stock market index.Nonetheless, a 100 bps rate hike would be extremely bearish for the S&P 500. This could be equally problematic for Bitcoin, whose correlation with stocks has been consistently positive since December 2021.FOMC policy decision scenarios for DXY and SPX. Source: John Kicklighter/DailyFXPolls expect a 75 bps rate hikeThe U.S. economy suffered two back-to-back quarters of negative growth. Moreover, its manufacturing PMI pointed to the slowest growth in factory activity since July 2020. Meanwhile, the 2-year U.S.Treasury returns have crossed above the 10-year U.S. Treasury returns, plotting a yield curve.Related: What’s next for Bitcoin and the crypto market now that the Ethereum Merge is over?These metrics raise the alarm about an impending recession. But offsetting those are unemployment data at its record low and housing starter rates still above their danger zone of $1.35 million, according to data presented by Charles Edwards, founder of Capriole Investments.Total new privately-owned housing units started. Source: FREDNormally, recession warnings prompt the Fed to pivot. In other words, to scale back or pause hiking rates. But Edwards notes that the central bank will not pivot since the U.S. economy is technically not in recession.”Until major concerns of recession show up, until it hurts where it counts — employment — there is no reason to expect an urgent change in Fed policy here,” he wrote, adding: “So it is business as usual until we have evidence that inflation is under control.”Most economists, or 44 of the 72 polled by Reuters, also predict that Fed would raise rates by 75 bps in their September meeting. Therefore, Bitcoin could avoid a deeper correction if it maintains its correlation with the S&P 500, based on Kicklighter’s outlook.Bitcoin to $14K next?From a technical perspective, Bitcoin could drop to $14,000 in 2022 if a drop below its current support level of around $18,800 triggers a “head-and-shoulders” breakdown.BTC/USD daily price chart featuring head-and-shoulder breakdown setup. Source: TradingViewConversely, a rebound from the $18,800-support could have BTC’s price eye $22,500 as its interim upside target, or a 16.5% rise from today’s priceThe 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.

Čítaj viac

Long the Bitcoin bottom, or watch and wait? Bitcoin traders plan their next move

Bitcoin (BTC) faced a 9% correction in the early hours of Sept. 19 as the price traded down to $18,270. Even though the price quickly bounced back above $19,000, this level was the lowest price seen in three months. However, pro traders held their ground and were not inclined to take the loss, as measured by derivatives contracts.Bitcoin/USD price index, 2-hour. Source: TradingViewPinpointing the rationale behind the crash is extremely difficult, but some say United States President Joe Biden’s interview on CBS “60 Minutes” raised concerns about global warfare. When responding to whether U.S. forces would defend Taiwan in the event of a China-led invasion, Biden replied: “Yes, if in fact, there was an unprecedented attack.”Others cite China’s central bank lowering the borrowing cost of 14-day reverse repurchase agreements to 2.15% from 2.25%. The monetary authority is showing signs of weakness in the current market conditions by injecting more money to stimulate the economy amid inflationary pressure.There is also pressure from the upcoming U.S. Federal Reserve Committee meeting on Sept. 21, which is expected to hike interest rates by 0.75% as central bankers scramble to ease the inflationary pressure. As a result, yields on the 5-year Treasury notes soared to 3.70%, the highest level since November 2007.Let’s look at crypto derivatives data to understand whether professional investors changed their position while Bitcoin crashed below $19,000.There was no impact on BTC derivatives metrics during the 9% crashRetail traders usually avoid quarterly futures due to their price difference from spot markets, but they are professional traders’ preferred instruments because they prevent the fluctuation of funding rates that often occurs in a perpetual futures contract.Bitcoin 3-month futures annualized premium. Source: LaevitasThe indicator should trade at a 4% to 8% annualized premium in healthy markets to cover costs and associated risks. Thus, one can safely say that derivatives traders had been neutral to bearish for the past two weeks as the Bitcoin futures premium held below 2% the entire time. More importantly, the shakeout on Sept. 19 did not cause any meaningful impact on the indicator, which stands at 0.5%. This data reflects professional traders’ unwillingness to add leveraged short (bear) positions at current price levels.One must also analyze the Bitcoin options to exclude externalities specific to the futures instrument. For example, the 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.Bitcoin 30-day options 25% delta skew: Source: LaevitasIn bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 12%. On the other hand, bullish trends tend to drive the skew indicator below negative 12%, meaning the bearish put options are discounted.The 30-day delta skew had been near the 12% threshold since Sept. 15, and signaled that options traders were less inclined to offer downside protection. The negative price move on Sept. 19 was not enough to flip those whales bearish, and the indicator currently stands at 11%.Related: Bitcoin, Ethereum crash continues as US 10-year Treasury yield surpasses June highThe bottom could be in, but it depends on macroeconomic and global hurdlesDerivatives metrics suggest that the Bitcoin price dump on Sept. 19 was partially expected, which explains why the $19,000 support was regained in less than two hours. Still, none of this will matter if the U.S. Federal Reserve raises the interest rates above the consensus or if stock markets collapse further due to the energy crisis and political tensions.Therefore, traders should continuously scan macroeconomic data and monitor the central banks’ attitude before trying to pin a flag on the ultimate bottom of the current bear market. Presently, the odds of Bitcoin testing sub-$18,000 prices remain high, especially considering the weak demand for leverage longs on BTC futures.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.

Čítaj viac

Bitcoin, Ethereum crash continues as US 10-year Treasury yield surpasses June high

Bitcoin (BTC) and Ethereum’s native token, Ether (ETH), started the week on a depressive note as investors braced themselves for a flurry of rate hike decisions from central banks, including the U.S. Federal Reserve and Bank of England.Bitcoin price fails to hold $20,000On Sep. 19, BTC’s price has failed to regain the $20,000 psychological support zone. The BTC/USD pair slipped by 6.5% to around $18,250, while ETH dropped 4% to approximately $1,280. Their gloomy performance came as a part of a broader decline that started in mid-August, wherein BTC and ETH wiped a total of 28% and 37% off their market valuation, respectively.BTC/USD and ETH/USD daily price chart. Source: TradingViewA 500 bps global rate hike ahead?This week, the Fed and a number of its global peers will potentially attack rising inflation by further raising interest rates.Data compiled by Bloomberg suggests that the U.S. central bank, alongside Sweden’s Riksbank, the Swiss National Bank, Norway’s Norges Bank, the Bank of England, and others, will raise lending rates by a combined 500 basis points, or 5%.Central banks’ rate decisions in the week ending Sep. 24. Source: BloombergThe market’s riskier assets have reacted negatively to these upcoming policy meetings. Last week, MSCI’s flagship global equity index, ACWI, which combines developed and emerging market stocks, fell 4.25% to nearly $84. At its peak, the index was trading for $107.39 in November 2021. Interestingly, Bitcoin and Ethereum peaked in the same month at $69,000 and $4,950, respectively.ACWI weekly price chart. Source: TradingViewTherefore, this growing correlation against the prospect of global rate hikes could continue to pressure BTC and ETH lower despite their growth-oriented narratives.#Ethereum Merge resulting in downside teaches us a valuable lesson. The global macro environment supersedes everything. If the global markets were generally bullish, then the Merge would have resulted in a pump. But it didn’t.This goes for #Bitcoin as well.— Kevin Svenson (@KevinSvenson_) September 18, 2022Instead, investors may seek safety in low-volatile assets, including the U.S. dollar and government bonds.For instance, the U.S. dollar index, a barometer to measure the greenback’s strength, rose by 0.5% to 110 on Sep. 19 after its highest weekly close since 2002. Similarly, six-month U.S. Treasury notes yield 3.79% if held until maturity, thus offering investors a safer investment alternative with guaranteed returns in the short term. Similarly, the U.S. 10-year Treasury yield has surpassed its June high when Bitcoin dropped to yearly lows. U.S. Treasury Yields as of Sep. 19. Source: BloombergOther shorter-dated and longer-dated T-bills yield similar returns.Bitcoin to $14K-$15K, Ethereum to $750 next?A mix of on-chain and technical indicators further hints at an imminent price crash in Bitcoin and Ethereum markets.First, the Bitcoin Spent Output Age Bands (7-10 years), which tracks spent BTC and bundles them into categories depending on their age, showed the movement of more than 5,000 BTC on Sep. 4. MACD_D, a user at the on-chain analytics platform CryptoQuant, argues that this is typically bad news for the price of Bitcoin.”If the holder, which held BTC in its seventh year, moves more than 5,000BTC, there could be a strong downward trend in the future,” the verified user wrote, stressing: “This indicator showed signal 7 in the past and fell 6 times except for 1 (07 Feb ’21) The fact that the long-term holder moved the BTC means that there will be an unusual price movement in the future.”Bitcoin spent output age bands (7-10 years). Source: CryptoQuantThe user also highlighted a recent rise in Ether dominance to over 20%, noting that it typically hints at a bubble that’s about to pop. Excerpts:”When #BTC is simply transverse, the excessive rise of Ethereum creates a bubble. In particular, if the ETH dominance rises by more than 20%, it provides a good timing to enter the short position.”Related: Goldman Sachs’ bearish macro outlook puts Bitcoin at risk of crashing to $12KFrom a technical standpoint, Bitcoin has entered the breakdown stage of its prevailing “bear flag” pattern, now eyeing an extended decline toward the flag’s profit target at around $14,500 in 2022.BTC/USD daily price chart featuring bear flag breakdown setup. Source: TradingViewMeanwhile, Ether has also been breaking out of a symmetrical triangle. As a result, ETH price could drop toward $750 if the bearish continuation pattern plays out, along with weakening technicals for the ETH/BTC pair as well. ETH/USD daily price chart featuring symmetrical triangle breakdown setup. Source: TradingViewIn other words, a 40% ETH price crash is on the table before the end of the year.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.

Čítaj viac

Biggest Fed rate hike in 40 years? 5 things to know in Bitcoin this week

Bitcoin (BTC) faces another week of “huge” macro announcements after the lowest weekly close since July.After days of losses following the latest inflation data from the United States, BTC/USD, like altcoins and risk assets more broadly, has failed to recover.The largest cryptocurrency has yet to flip $20,000 to convincing support, and as the third full week of September begins, the danger is once again that that level could function as resistance.Bulls have plenty to worry about — the coming days will see the Federal Reserve decide on the next key rate hike, something that will affect the market far beyond mere sentiment.In addition, the aftermath of the Ethereum (ETH) Merge continues to play out, while at defunct exchange Mt. Gox, reimbursements to creditors add another potential cloud to the Bitcoin price landscape. Cointelegraph takes a look at five potential market-moving factors to keep an eye on in Bitcoin over the coming week.Fed rate hike “sledgehammer” in focus The main event for the week comes in the form of the Federal Reserve’s decision on key interest rates.After the Consumer Price Index (CPI) print for August came in “hotter” than expected, the Fed will be under pressure to respond.As such, the market has now fully priced in a minimum 75-basis-point hike for the Fed funds rate, and is not discounting the chances of 100 basis points, according to the CME FedWatch Tool as of Sep. 19.A 100-point increase would be the Fed’s first such action since the early 1980s.Fed target rate probabilities chart as of Sep. 19, 2022. Source: CME GroupThe Federal Open Market Committee (FOMC) is due to meet on Sep. 20-21, and will publish a statement confirming the hike and Fed support for the figure involved.“The Fed will not be easing any time soon, and it’s classic human nature because now we have the benefit of knowing how far in the mistakes they made by easing too much,” Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said in an interview with Kitco over the weekend.Risk asset growth since the March 2020 crash had “swung way too far to one side,” he said, and it is now “very clear” that a reversal will take hold.Crypto will figure in the overall market reset, and Bitcoin will ultimately come out ahead, McGlone continued, reiterating a long-held theory about the cryptocurrency’s future. Gold will also outperform, but for both, pain is to come first.“Unfortunately, for the Fed to stop this sledgehammer, risk assets have to make them stop by tightening for them,” he summarized.A 100-basis-point move this week would hasten that process, which is now seeing catalysts from central banks beyond the U.S. after these were initially slow to begin raising rates to combat inflation.Popular Twitter analytics account Games of Trades meanwhile said that it was crunch time for the S&P 500 ahead of the start of Wall Street trading.#SP500 has reached its “line in the sand” level.This is the point of sink-or-swim. Fly-or-fall. Fish-or-cut-bait. pic.twitter.com/ZaCfAfcHcE— Game of Trades (@GameofTrades_) September 18, 2022“In times like this, with major uncertainty across the board, the Crypto market is not gonna do much without permission from equities,” analyst and commentator Kevin Svenson added.Spot price sinks after poor weekly closeThe past week has seen tailwinds stack up for Bitcoin, leading to BTC price action falling in kind.BTC/USD lost over $2,000 in a single weekly candle, closing below $20,000 in what is the lowest such close since July, data from Cointelegraph Markets Pro and TradingView shows.BTC/USD 1-week candle chart (Bitstamp). Source: TradingViewThe close was followed by a sharp downturn in which the pair fell under $19,000.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewThe bearish mood is perhaps understandable — the Ethereum Merge became a “sell the news” event, and along with macro triggers contributed to a fresh risk asset flight.Now, analysts are considering the chances of the downtrend staying in place at least until the Fed rate announcement passes.“BTC has chopped through the weekend, but there’s always potential for some volatility before the close,” on-chain analytics resource Material Indicators told Twitter followers in part of a post on Sep. 18. “Huge economic and FED announcements next week will make things spicy again.”An accompanying chart showed the state of play on the Binance order book, with support at around $19,800 since failing to sustain price action.The day prior, Material Indicators had reasoned that there was likewise little point in imagining that a deeper drop would be avoided. Judging from the order book, bidding action was still not strong enough to support current levels.If #Bitcoin was really near THE BOTTOM, do you think there would be a liquidity gap between $18k – $18.5k, and wouldn’t you also expect there to be solid bids at least to the June low at $17.5k? #FireChartsI have no more questions. pic.twitter.com/Xstusqg2T8— Material Indicators (@MI_Algos) September 16, 2022

Considering when a macro bottom could occur, meanwhile, popular trader Cheds bet on Q4 this year, describing Bitcoin as “right on track” to do so.“$BTC weekly starting to press range lows,” he added in a further tweet into the weekly close. Shorts were stacking up at the time of writing on both Binance and FTX, suggesting a concerted effort to drive the market lower by derivatives traders. This, fellow popular account Ninja argued, would not ultimately be successful beyond the Wall Street open.U.S. dollar coils beneath multi-decade peakKeenly eyeing a potential macro high, meanwhile, is the U.S. dollar, which has rebounded from losses seen post CPI print. A classic headwind for crypto, the U.S. dollar index (DXY) currently sits at just under 110, having consolidated for several days. The Index hit 110.78, its highest since 2002, earlier this month, while avoiding enduring significant retracements.Analyzing the immediate future last week, Hyland warned that a “new blow off top” for DXY would accompany a “capitulation event” in risk assets.We are heading toward a capitulation event -Gold-BTC-StocksWe are also heading toward a blow off top of the US DollarWhen? No clue but there is nothing that says the DXY has topped It’s actually currently in position for the highest weekly close of the year: pic.twitter.com/UHrJfYsSQP— Matthew Hyland (@MatthewHyland_) September 15, 2022

A look at the inverse correlation between DXY and BTC/USD meanwhile confirms the impact of sharp upwards moves of the former on the latter.U.S. dollar index (DXY) vs. BTC/USD 1-day chart. Source: TradingViewEthereum gets the post-Merge bluesIn the week after the much-vaunted Merge, Ethereum is experiencing a major comedown from the hype.In a move which may skew market cap share back in Bitcoin’s favor, ETH/USD declined 25% last week.Currently trading under $1,300, its lowest since July 16, the pair is seeing bearish prognoses from analysts and traders across the board.ETH/USD 1-hour candle chart (Binance). Source: TradingView“Ethereum failing to hold critical support,” Svenson warned as the weekly close failed to draw a line under the losses.Analyst Matthew Hyland meanwhile gave a target of $1,000 for ETH/USD, adding that $1,250 “should hold as some support.”$ETH There is also the grab of the $1355 low as I mentioned would be a good level to take out.Will the bulls be able to run it back?A 4H close above $1355 would be decent for the bulls. If not, I’d be targetting $1285 next. https://t.co/LZACSzzJok pic.twitter.com/Za2Ln5ydgj— Daan Crypto Trades (@DaanCrypto) September 18, 2022

Against BTC, Ethereum was down up to 19% over the week, with Bitcoin’s share of the overall crypto market cap increasing 1.2% since Sep. 14.For well-known trader CryptoGodJohn, everything was nonetheless playing out for a “generational entry” opportunity on the pair.Less enthusiastic was Samson Mow, CEO of Bitcoin adoption startup JAN3, who noted that while ETH/USD was still above its 200-week moving average (WMA) at current levels, Bitcoin was below its own equivalent.#Bitcoin is trading 16% below its 200 WMA.#Ethereum is trading 7% above its 200 WMA.ETH is down 6% for the day, while BTC is just down 2%. ETH is still trading at a premium based on Merge expectations and can go much much lower. ETH 16% below 200 WMA would be ~$1k. pic.twitter.com/jh7j13ivMd— Samson Mow (@Excellion) September 18, 2022

The 200 WMA functions as an important trendline during crypto bear markets, and reclaiming it after its loss as support has historically signified a return to strength.Dormant Bitcoin supply continues to ageEven as recent price volatility sees an uptick in on-chain activity, hodlers are keeping their resolve, on-chain data confirms. Related: Here is why a 0.75% Fed rate hike could be bullish for Bitcoin and altcoinsAccording to analytics firm Glassnode, coins held for a period of at least five years are showing just one trend — up.In fresh data on the day, Glassnode confirmed that the percentage of the BTC supply last active in September 2017 or earlier reached a new all-time high of 24.8%.Bitcoin % supply last active 5+ years ago chart. Source: Glassnode/ TwitterThe amount of the supply last active between five and seven years ago, meanwhile, hit its highest in almost two years — 1.01 million BTC.Bitcoin supply last active 5-7 years ago chart. Source: Glassnode/ TwitterAt the same time, “younger” coins are also on the move, with the 6-12 month bracket seeing five-month highs of its own.Nonetheless, the long-term trend among seasoned investors is clear when it comes to Bitcoin, as evidenced by the supply portion held by long-term holders (LTHs).“LTH Supply is the volume of Bitcoin which has been dormant for 155-days, and is statistically the least likely to be spent during market volatility,” Glassnode explained last week as the metric hit all-time highs of 13.62 million BTC.After the CPI event, as Cointelegraph reported, Bitcoin flows to exchanges saw their largest single-day tally in several months.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.

Čítaj viac

Goldman Sachs' bearish macro outlook puts Bitcoin at risk of crashing to $12K

A sequence of macro warnings coming out of the Goldman Sachs camp puts Bitcoin (BTC) at a risk of crashing to $12,000.Bitcoin in “bottom phase?”A team of Goldman Sachs economists led by Jan Hatzius raised their prediction for the speed of Federal Reserve benchmark rate hikes. They noted that the U.S. central bank would increase rates by 0.75% in September and 0.5% in November, up from their previous forecast of 0.5% and 0.25%, respectively.Fed’s rate-hike path has played a key role in determining Bitcoin’s price trends in 2022. The period of higher lending rates — from near zero to the 2.25-2.5% range now — has prompted investors to rotate out of riskier assets and seek shelter in safer alternatives like cash.Bitcoin has dropped by almost 60% year-to-date and is now wobbling around its psychological support of $20,000. Some analysts, including a pseudonymous trader Doctor Profit, believe BTC’s price has entered the bottom phase at current levels. However, the trader warned:”Please consider FEDs next decisions. 0.75% [rate hike] already priced in, 1% and we see blood.”BTC/USD price performance comparison between 2012-2016 and 2020-2022. Source: Doctor Profit/TradingViewOn the other hand, Bitcoin’s consistently positive correlation with the U.S. stock market, particularly the tech-heavy Nasdaq Composite, poses deeper correction risks.Sharon Bell, a strategist at Goldman Sachs, suggests the recent rallies in the stock market could be bull traps, echoing her firm’s warning that equities could crash by 26% if the Fed gets more aggressive with its rate increases to fight inflation.Interestingly, the warnings coincide with a recent rise in Bitcoin short positions held by institutional investors, according to CME data highlighted in the Commodity Futures Trading Commission’s (CFTC) weekly report.CME Bitcoin derivatives held by smart money. Source: CFTC/Ecoinometrics”Definitely a sign that some people are counting on a risk asset meltdown this fall,” noted Nick, an analyst at data resource Ecoinometrics.Options consensus see BTC at $12KBitcoin options expiring at the end of 2022 show most traders betting on the BTC price dropping all the way down to the $10-000-12,000 area.BTC options open interest by strike price. Source: CoinglassOverall, the call-put open interest ratio was 1.90 on Sep. 18, with call options for the $45,000 strike price carrying the maximum weight. But strike prices between $10,000 and $23,000 showed at least four puts for every three calls — which is perhaps a more realistic, interim evaluation of market sentiment.Related: Tired of losing money? Here are 2 reasons why retail investors always loseFrom a technical perspective, Bitcoin’s price could drop by roughly 30% to $13,500 as the price forms a convincing inverse up-and-handle pattern.BTC/USD daily price chart with inverse cup-and-handle breakdown setup. Source: TradingViewConversely, a decisive rally above the 50-day exponential moving average (50-day EMA; the red wave) near $21,250 could invalidate this bearish setup, positioning BTC for a rally toward $25,000 as its next psychological upside target.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.

Čítaj viac
Načítava

Získaj BONUS 8 € v Bitcoinoch

nakup bitcoin z karty

Registrácia Binance

Burza Binance

Aktuálne kurzy