Category Archive : Cryptocurrency

Institutional Interest in Shorting Bitcoin Rises to Record Levels in US (Report)

Exposure to shorting Bitcoin’s price saw record inflows of $51 million last week as the asset crumbled below $20,000, a new report showed.

Shorting Dominates in the US

According to the latest CoinShares’ weekly ‘Digital Asset Fund Flows’ report, a total of $64 million in inflows in the digital asset investment products was observed between June 27 and July 1, and a major chunk of 80% went into shorting Bitcoin investment products.

The interest in shorting comes as Bitcoin posted the worst quarterly performance in a decade. A gloomy macro forecast, looming recession fears, and high-profile crypto firms struggling with the impact of the sell-off have all contributed to the bearish sentiment.

As a result, the US accounted for $46.2 million of inflows. The recently launched ProShares Short Bitcoin Strategy ETF, a fund that tracks bets against the price of Bitcoin alone, loaded up more than $43 million worth of inflows over the past week.

CoinShares noted that the accessibility of ProShares’ BITI offering shorting exposure via futures contracts for investors mulling a bet against Bitcoin had driven the current figures.

“This highlights investors are adding to long positions at current prices, with the inflows into short-Bitcoin possibly due to first-time accessibility in the US rather than renewed negative sentiment.”

Other than the US, inflows in long positions on Bitcoin were seen in Brazil, Canada, Germany, and Switzerland, which totaled $20 million.

The increase in short Bitcoin funds comes a week after CoinShares’ reported the largest ever digital asset products outflows that reached an astonishing record-high of $423 million. Bitcoin products saw net outflows worth $453 million during this time.

Diversification Has Begun

Investors are also beginning to diversify as inflows of several altcoins such as Solana, Polkadot, and Cardano’s totaled $1 million, $0.7 million, and $0.6 million, respectively. Ethereum also managed to finally break the 11 weeks of outflows by snapping up $5 million in inflows in the past week.

Furthermore, multi-asset investment products managed to float relatively smoothly despite the crypto carnage in the weeks prior. The report suggested that this cohort of products was least affected by the negative sentiments of the crypto winter and saw inflows worth $4.4 million while recording minor outflows only two weeks of this year.

The Wolf of Wall Street: Investors Will ‘Almost Certainly’ Profit by Hodling BTC for 3 years

The popular public figure Jordan Belfort (better known as “The Wolf of Wall Street”) advised investors to look at bitcoin as a long-term investment. In his view, those who hold the asset for over 36 months will most probably make some profits.

Belfort’s Crypto Guidance

Jordan Belfort – the infamous stock broker whose story inspired Martin Scorsese’s film “The Wolf of Wall Street” – has not always been kind to the primary cryptocurrency. In 2018, he opined that bitcoin is based on the Great Fools Theory, and investors should get out of its ecosystem before losing all their money.

Amidst the bull run in the spring of 2021, though, Belfort totally changed his stance and predicted that the asset could reach $100,000 by the end of the year.

He doubled down on his support during his most recent interview for Yahoo Finance. He praised its limited supply of 21 million coins ever to exist, claiming that as inflation keeps rising, bitcoin will “start to trade more like a store of value and less like a growth stock.”

“The Wolf of Wall Street” also thinks the leading digital asset could be an appropriate investment tool as long as people have “diamond hands” and do not sell it for a period of 3-5 years (even though price fluctuations will imminently occur):

“If you take a three or maybe five-year horizon, I would be shocked if you didn’t make money because the underlying fundamentals of bitcoin are really strong.”

Subsequently, the American opined that bitcoin is still in its early days, which is why it is normal to correlate with the NASDAQ and tech stocks and not trade as a hedge against inflation (similar to gold).

“There is no real institutional ownership in bitcoin, for instance, you don’t have a teachers pension fund owning bitcoin for a ten-year hedge, it’s not like that yet,” he added.

Jordan Belfort, Source: BBC

The Dangers of the Crypto Industry

Apart from bitcoin, Belfort gave his two cents on how people should protect themselves from cryptocurrency scams. Compared to traditional finance, the digital asset sector lacks comprehensive rules, which explains why sometimes “people are getting slaughtered.”

“In crypto, you can go out and raise money, but there is no disclosure, and every time there is no disclosure, it always ends badly,” he stated.

He advised investors to beware when dealing with a certain cryptocurrency project and get familiar with its executive team. Belfort believes that a protocol with unknown owners should be considered a huge concern.

Lastly, he warned people to check the utility of the projects they want to invest in. If the idea behind a particular enterprise works better from a centralized server, “I would probably not get involved,” he said.

Bitcoin Taker Buy/Sell Ratio Short-Term Bull Signal Goes Off

On-chain data shows the Bitcoin taker buy/sell ratio has recently crossed above ‘1,’ a sign that the crypto could experience short-term bullish momentum.

Bitcoin Taker Buy/Sell Ratio Surges Up Above A Value Of 1

As explained by an analyst in a CryptoQuant post, the current BTC taker buy/sell ratio trend may suggest the crypto might see sideways movement or a bullish reversal in the short-term.

The “taker buy/sell ratio” is an indicator that tells us about the ratio between the long and short volumes in the Bitcoin futures market.

When the value of this metric is greater than one, it means the long volume is more dominant at the moment. Such a trend suggests that the general sentiment is bullish right now.

Related Reading | Bitcoin Long-Term Holder Capitulation Approaching Bottom Zone, But Not Quite There Yet

On the other hand, the indicator’s value being less than that implies that the selling pressure is currently stronger than the buying pressure in the Bitcoin market.

Now, here is a chart that shows the trend in the BTC 50-day moving average taker buy/sell ratio over the last year:

Looks like the value of the metric has surged up in recent weeks | Source: CryptoQuant

As you can see in the above graph, the quant has marked the relevant points of trend for the Bitcoin taker buy/sell ratio.

It seems like whenever the indicator has sunk below a value of one, the coin’s price has observed a bearish trend soon after.

Related Reading | Experts Are Calling Out That Bitcoin Is Dead. Projects Like Gnox (GNOX) And Fantom (FTM) Ushering In New Age Of Crypto.

Similarly, the ratio crossing over the one line has usually been followed by a bullish reversal or sideways movement for the crypto.

In recent weeks, the taker buy/sell ratio’s value has once again observed a surge and has now gone past the “one” threshold.

If the past trend is anything to go by, this could mean that Bitcoin may have either a temporary bullish reversal or sideways movement in store for the near future.

BTC Price

At the time of writing, Bitcoin’s price floats around $20.5k, up 2% in the last seven days. Over the past month, the crypto has lost 31% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of the crypto seems to have shot up over the past day | Source: BTCUSD on TradingView

Over the last few days, Bitcoin has been mostly consolidating sideways. However, in the past twenty-four hours or so, the coin’s value seems to have gained some upwards momentum as it now breaks above the $20k mark again.

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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Bitcoin Reserve Risk Falls To 2015 Levels, What Happened To BTC’s Price That Year?

Bitcoin has returned to the $20,000 area after experiencing rejection. The cryptocurrency has been displaying some strength during today’s trading session despite a spike in the U.S. dollar which signals danger for risk-on assets.

Related Reading | Cardano Releases New Update On Testnet, How Will The Price Respond?

At the time of writing, BTC’s price trades at $20,300 with a 2.2% profit in the last 24 hours. Data from Material Indicators (MI) records an increase in buying pressure from Bitcoin whales with bid orders of over $1 million (brown in the chart below).

Large investors have been accumulating BTC over the past week as the cryptocurrency moved below its current levels. BTC Whales could have been preparing for bullish continuation. At the time of writing, every investor’s class except retail is jumping into BTC’s price action.

#Bitcoin #WhaleWatching pic.twitter.com/BOYAEABpyC

— Material Indicators (@MI_Algos) July 5, 2022

The cryptocurrency needs to break above $20,500 and continue above $22,000 to clear out any potential short-term downside risk.

Material Indicators records over $20 million in asks order for BTC’s price at around $20,500 until $22,000 alone. There is little resistance above those levels until $24,000 which stands as the next major area of resistance.

On the possibility that large investors were accumulating BTC expecting a larger move to the upside, MI wrote:

The FireCharts heat map and CVD both show that the purple class of whales which have historically had the most influence over BTC price have been trending up since the dump to $17.5k on May 18th. Too early to validate this as accumulation phase. Time will tell.

The key behind the current price action could be the U.S. dollar. The currency aggressively moved to the upside, to levels last seen in 2003, and could be about to retest previous lows.

As seen below, this could send the DXY Index to the 105 area or to its June range below 100, if these levels fail. Thus, providing some more room for BTC’s price to reclaim higher levels.

DXY Index (U.S. Dollar) sees some losses after a breakout on the daily chart. Source: Tradingview
Bitcoin Indicators Suggest Bullish Continuation

Quantum Economics analyst Jan Wüstenfeld indicated that BTC’s Reserve Risk dropped to 0.001, a metric used to measure long-term holders’ conviction. The last time Bitcoin saw a Reserve Risk this low was in 2015 before it began a persistent uptrend.

Related Reading | Bitcoin (BTC) Claws Back To $20,000, First Time In 5 Days

Currently, there are macroeconomics factors that could hurdle BTC’s price reclaim of previous highs. However, the current area could be a major accumulation zone for the coming months and a good place to apply a Dollar Cost Average (DCA) strategy. Wüstenfeld said:

Bitcoin reserve risk has fallen below the green box. The last and only other time this happened was in August 2015. One thing is sure, this cycle is genuinely different to other cycles due to the macro conditions, and we are partially seeing that as well in the indicators.

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Core Scientific Sold Most of its Bitcoin Holdings in June

The publicly traded Bitcoin miner Core Scientific confirmed on Tuesday that it sold $167 million worth of Bitcoin in June alone. This selloff leaves the miner with just 1,959 Bitcoin remaining on its balance sheet, alongside $132 million in cash.

A Closer Look at the Miner Selloff

As revealed in the company’s monthly operational update, Core Scientific operates over 180,000 ASIC servers across Georgia, Kentucky, North Carolina, and North Dakota. These servers cumulatively produce 17.9 exahashes per second (EH/s) – the inputs used to mine Bitcoin blocks. For context, Bitcoin’s average daily hash rate is approximately 197 EH/s at the time of writing.

Producing these hashes costs a lot of energy, however, which effectively represents an explicit cost for mining Bitcoin. As such, a miner’s net profitability can be severely impacted by its ability to source cheap electricity, the efficiency of its ASICs (mining machines), and Bitcoin’s price.

The latter variable has been miners’ greatest foe over the past two months. As Bitcoin’s price fell following Terra’s collapse and its contagious aftermath, miners have been significantly less profitable. In fact, data from Arcane Research shows that miners sold more than 100% of their Bitcoin profits in May, with deeper losses expected for June.

If Core Scientific is any indication, this expectation is proving true. In June, the mining firm sold exactly 7,202 Bitcoin for an average of $23,000 each, while only mining 1,106 Bitcoin in return. That’s a 651% selloff.

Proceeds from those Bitcoin sales were primarily used on ASIC servers, data center capacity, and “scheduled repayment of debt.”

In a statement, Core Scientific CEO Mike Levitt acknowledged that the mining industry is undergoing “enormous stress” amid weak markets and unprecedented interest and inflation rates.

“Our company has successfully endured downturns in the past, and we are confident in our ability to navigate the current market turmoil,” he said.

How Are Other Miners Faring?

The market has also left mining firms like Compass Mining and Bitfarms in financial trouble. Compass saw both its CEO and CFO abruptly step down last week amid “multiple setbacks and disappointments” combined with its $500,000 electricity debt. Meanwhile, Bitfarms sold 3000 Bitcoin in June, representing over 50% of its holdings.

Marathon Digital was even less fortunate. It recently saw 75% of its mining fleet rendered powerless due to a Montana storm, per an announcement last Tuesday.

FinTech Acquisition Corp Mutually Terminates Merger Agreement With eToro

FinTech Acquisition Corp. V (Fintech V) – a special purpose acquisition company focused on financial services – has agreed to call off its merger agreement with eToro. The social investing network said that the companies failed to satisfy certain closing conditions by June 30th, making them unable to complete the transaction.

According to a press release from eToro on Tuesday, one such condition related to the company’s registration statement. Having been left unsatisfied, the merger agreement has been terminated, effective immediately.
Announced in March, the merger agreement would have allowed eToro to go public. The firm provides a trading platform for stocks, commodities, ETFs, and cryptocurrencies to over 27 million registered users.
Fintech V is a blank-check (SPAC) firm backed by the banking entrepreneur Betsy Cohen. The chairman showed disappointment over the failed merger agreement, which he blamed on “circumstances outside of either party’s control.”
Meanwhile, eToro CEO Yoni Assia maintains that the firm’s underlying business remains healthy, despite the undesirable outcome of the deal.

“We remain confident in our long-term growth strategy and excited for the future of eToro,” he said.

As the agreement to terminate the deal was mutual, neither party will need to pay a termination fee to the other.
When the merger was announced, the estimated equity value of the combined entities stood at $10.4 billion.
In November, eToro delisted Cardano and Tron from its platform due to regulatory concerns, which disappointed Cardano founder Charles Hoskinson.

Celsius Beats Down Liquidation Price With $120 Million In Loan Repayments

Celsius has been at the center of most crypto controversies in the last month. The lending platform had had to pause withdrawals, transfers, and swaps on its platform, citing extreme market conditions as the reason, but that was only the beginning of its troubles. However, Celsius looks to be taking it on the chin because contrary to what others have done, the platform has made moves to pay down its debts and has now beaten down its liquidation price by more than 200%.

Celsius Pays $120 Million In Loans

The beginning of the week came with good news for the Celsius lending platform which had been able to put more money towards its loans. Previously, the company had added 7,000 BTC that had brought its liquidation price down to $16,582 but remained at risk given the volatile nature of bitcoin. That is why the company has continued to add to its position to beat down the liquidation price to save the platform.

Related Reading | Mounting Support For Bitcoin At $19,000 As Market Ushers In A New Week

Over the weekend, it was reported that Celsius had padded up its position once more, and in a series of repayments since July 1st, the lending platform has paid a cumulative $142.8 million. The latest of these payments had been the most prominent with the platform paying $64 million in DAI stablecoin towards its loans. This payment had come hours after another significant repayment of $50 million in DAI stablecoins.

As it stands, Celsius has managed to beat its liquidation price down to $4,967, a more comfortable point for the lending protocol and its users who are still hoping to get back their coins that are now stuck on the platform. Celsius’s outstanding loans now sit at $82 million with an overcollaterization ratio above 577%.

CEL token trading at $0.89 | Source: CELUSD on TradingView.com
Will Users Get Their Coins Back?

Celsius is yet to address users on if they will be getting their funds which are stuck on the platform back. There is a good portion of the market that has considered these coins lost, but with Celsius’ multiple loan repayments, it continues to spark hope in the hearts of investors that they would be able to one day withdraw assets again.

Related Reading | Active Ethereum Addresses Touch 2020 Levels, Will Price Follow?

Users have reported that the lending protocol has continued to pay rewards on their holdings despite not being able to withdraw. Its native token, CEL, had seen a significant run-up after suffering a terrible loss following the announcement of blocked withdrawals. 

Its last communique with the public had been through a Medium post where the platform announced that it continues to work towards stabilizing liquidity and restoring operations. The blog post did not contain information about when it will be restoring withdrawal options. However, it did state that it continues “to take important steps to preserve and protect assets and explore options available to us.”

Featured image from Reuters, chart from TradingView.com

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Does Sentiment Shifting Slowly Signal A Crypto Recovery Ahead?

The crypto market has lost momentum after the extended weekend in the United States. Bitcoin and other larger cryptocurrencies have been recording losses during today’s trading session and could continue to trend downside in the short term.

Related Reading | TA: Ethereum Regains Strength, Showing Early Signs of Fresh Rally

At the time of writing, the crypto total market cap stands at $860 billion with sideways movement over the past weeks. This metric has been trending to the downside since late 2021, but took a severe loss in April-May 2022, as seen in the chart below.

The crypto total market cap trends to the downside on the 4-hour chart. Source: Tradingview

As a consequence, the general sentiment across the crypto market trended to the downside and recorded extreme fear levels on the Fear and Greed Index. The price of Bitcoin and other larger cryptocurrencies often finds a local bottom or top when the Index stands close to 10 or 80 respectively.

The crypto market did find a bottom in June when BTC’s price traded close to $17,000 and pushed the Fear and Greed Index to extreme levels. Since that time, the number one cryptocurrency has pushed the market slightly upwards and has been forming a new range between $18,600 and $21,000.

These levels stand as the major area of resistance along with $22,000. Market participants seem more positive on a probably break above these levels, according to a recent report from Arcane Research. The first stated the following on the shift in market sentiment over the past weeks:

The sentiment in the crypto market has been depressed for several months, but we’re seeing a slight improvement this week. After the Fear and Greed Index climbed to 19 yesterday, we’re at the highest point in two months. While we’re still comfortable in the “Extreme Fear” area, we’re now pushing towards the “Fear” area, and the market is slightly more optimistic (…).

Source: Arcane Research
Ready For More Crypto Downside?

The crypto total market cap and the performance of the altcoin market are bound to BTC, ETH, and larger cryptocurrencies. As NewsBTC has been reporting, the sector is currently impacted by macro-economic factors; rising inflation, and interests rates hikes by the U.S. Federal Reserve (FED).

These factors’ influence over the market must mitigate before the nascent asset class can decouple from traditional finances. In the meantime, any bullish momentum will remain susceptible.

Related Reading | Cardano Releases New Update On Testnet, How Will The Price Respond?

If the price of Bitcoin is unable to push above $22,000 soon, the market could see a decline in the Fear and Greed Index. Data from Material Indicators and their Trend Precognition Indicators suggest it is likely to see a re-test of lower levels. Via Twitter, the analysts wrote:

BTCUSDT and ETHUSDT were both rejected at the 21 Day Moving Average and now we see the Trend Precognition A1 Slope Line rolling over on the D chart indicating a short term loss of momentum.

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CoinLoan Reduces Withdrawal Limits but Claims No Exposure to Luna, Celsius, 3AC

CoinLoan – a company that offers crypto-backed loans and interest-earning accounts – said it will balance the flow of funds on its platform by reducing the account withdrawal limits. The firm assured that the amendment is temporary as each user would be able to withdraw up to $5,000 per 24-hour rolling period.

CoinLoan’s Steps Amidst the Market Pullback

The Estonia-based cryptocurrency lending platform – CoinLoan – became the latest firm in the field to announce some changes due to the adverse market conditions. Its temporary measures include the reduction of withdrawal limits.

The company said a suspension of all withdrawals is not on the agenda since some customers have stored their life savings on CoinLoan. The procedure will allow the platform to conduct stable operations in the future as sometimes “prevention is better than cure.”

The crypto lender also stated that it has no exposure to distressed protocols such as Terra, Three Arrows Capital, and Celsius. “The reason is simple – our strategy bars risky activities that could endanger CoinLoaners’ funds,” the entity explained.

The team also assured its users that their assets were safe. Being one of the oldest CeFi platforms in the field, CoinLoan has seen numerous negative events and is confident that its expertise will guide it through the current chaos:

“Since 2017, we have seen multiple adverse situations, but each of them gave CoinLoan strength and contributed to its growth. We understand how to handle difficulties, and we are also well-equipped to prevent them.”

Companies That Took a Major Punch

The ongoing crypto winter has significantly harmed leading digital asset exchanges like Coinbase, Gemini, and Bybit. Because of the diminishing investor interest, all those had to lay off a chunk of their employees.

The Singapore-based trading venue Vauld and the lending firm BlockFi were also affected. The former dismissed 30% of its total personnel and suspended all transactions and withdrawals. Earlier today (July 5), CryptoPotato reported that Nexo is willing to acquire the troubled entity.

BlockFi also had to make some redundancies among its staff. Additionally, the State of Iowa ordered it to pay an administrative fine of nearly $1 million for failing to register as a securities trading platform.

Amidst all these issues, FTX (an exchange spearheaded by Sam Bankman-Fried) displayed its intentions to purchase BlockFi. Interestingly, the offer was for a mere $25 million (considering the fact that BlockFi’s latest known private valuation hit $3 billion).

Later on, Ledn revealed similar plans as it aims to lead a $400 million fundraiser and provide a $50 million equity contribution that could grant it a significant proportion of BlockFi.

Bitcoin Price Analysis: BTC Testing $20K But is Another Pullback Coming?

After a slight recovery from the $18.7K mark over the last few days ago, Bitcoin’s price is now slowly drifting around the 2017 ATH level. The cryptocurrency market, however, has not demonstrated any evidence of strength or reversal patterns.

Technical Analysis

By Shayan

The Daily Chart

As seen in the following chart, the price has been forming lower lows and lower highs, which indicates strong bearish momentum. Accordingly, BTC hasn’t yet been able to form a new higher high in the daily timeframe. Therefore, a bullish rally cannot be anticipated until it develops a reversal pattern and records a new significant higher high above the $32K key level.

On the other hand, a prolonged ranging phase or consolidation can ultimately result in another bearish move to the critical $16.6K level.

Source: TradingView

The 4-Hour Chart

Over the past few weeks, the $18K level has significantly supported the Bitcoin price. Additionally, the lower boundary of the shown triangle has also supported the price, pushing to break the channel’s middle trendline.

The price has been rejected after exceeding the mid-trendline of the channel and failing to test the triangle’s upper trendline. However, the most recent shakeout may be a pullback to the broken boundary. If Bitcoin successfully forms the pullback, a surge followed by the triangle breakout will be more likely.

Source: TradingView

However, if the triangle pattern and the $18K significant support level fail to hold the price, this would make a decline much more probable. In this scenario, the triangular pattern is a continuation correction pattern for the leading bearish leg.

Sentiment Analysis

By: Edris

Bitcoin Taker Buy Sell Ratio (SMA 50)

Thanks to the growing share of the Futures Market against the Spot Market, Bitcoin’s price has been determined mainly by this sector over the last 18 months. One of the critical indicators to evaluate the Futures market sentiment is the Taker Buy Sell ratio which, in short, indicates whether the bulls or the bears are more aggressive and in control.

As demonstrated on the chart, values below 1 indicate more selling pressure and likely coincide with bearish price action. Conversely, values above one tend to lead to bullish price action. It is evident that this metric has broken above one, and the price seems to be consolidating and potentially starting a bullish trend in the short term.

Source: CryptoQuant

However, note that it could be a consolidation or a bullish pullback before another continuation lower. So, many other factors should be considered closely in the coming weeks to determine if a bullish reversal or another bull trap could be expected.