BTC/USD

Ethereum is ahead of Bitcoin this rally — But ETH price still risks 20% crash against BTC

October 26, 2022 Coin Telegraph

Bitcoin

Ether has entered a bearish range that preceded a 35% price crash in the April–May 2022 session.

Ethereum’s native token, Ether (ETH), recorded better gains than Bitcoin (BTC) over the past 24 hours despite the latter finally rising above the key $20,000 level.

Ether beats Bitcoin in risk-on rally

On the daily chart, Ether jumped approximately 14% to reach its weekly high of $1,554 (data from Binance) on Oct. 26. Bitcoin underwent a similar rally, but its week-to-date profits are just 6% by comparison.

The ETH/BTC pair gained around 8%, climbing as high as 0.075 BTC on Oct. 26.

*ETH/BTC daily price chart. Source: TradingView*

The boom across the top crypto assets has been synchronous with the United States stock market’s winning streak since Oct. 24. It also came on the backdrop of a weaker U.S. dollar index, which has been typically trading inversely to the crypto market since March 2020.

Bear fractal alarm

ETH/BTC’s latest price rally has taken it to a range that preceded a 35% correction in the April–May 2022 session (marked as “R1” in the chart below) and was instrumental in limiting its upside prospects in August–September 2022 (marked as “R3” in the chart below).

*ETH/BTC 3-day price chart. Source: TradingView*

The range coincides with the area defined by ETH/BTC’s 0.236–0.382 Fib lines, or 0.072 BTC–0.077 BTC. Therefore, the pair may stabilize inside the range, followed by a correction toward the 0.068 BTC–0.064 BTC area, its near-term support levels.

Meanwhile, a decisive breakdown below the 0.068 BTC–0.064 BTC area could expose Ether to fall toward its multi-month ascending trendline, which served as a solid rebound point after the April–May 2022 downtrend.

$ETHBTC | Update

The outlook after closing the pair at the top.
You can have a nice projection by analyzing RTed tweets (for education).

With mLTF bearish indications from the red box, the price may visit the lows of the green box.

The red lines are another resistance zone. https://t.co/6zFhLWT1A0 pic.twitter.com/rKnxWsCS3E
— Efloud (@EfloudTheSurfer) October 26, 2022

That puts ETH/BTC’s primary downside target at around 0.059 BTC in Q4 2022, down 20% from current price levels.

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.

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The biggest Bitcoin fund just hit a record -35% discount — A warning for BTC price?

September 24, 2022 Coin Telegraph

Bitcoin

Institutional interest in Grayscale Bitcoin Trust continues to dwindle 10 months into the crypto bear market.

Grayscale Bitcoin Trust (GBTC), a cryptocurrency fund that currently holds 3.12% of the total Bitcoin (BTC) supply, or over 640,000 BTC, is trading at a record discount compared to the value of its underlying assets.

Institutional interest in Grayscale dries up

On Sep. 23, the $12.55 billion closed-end trust was trading at a 35.18% discount, according to the latest data.

*GBTC discount versus spot BTC/USD price. Source: YCharts*

To investors, GBTC has long served as a great alternative to gain exposure in the Bitcoin market despite its 2% annual management fee. This is primarily because GBTC is easier to hold for institutional investors because it can be managed via a brokerage account.

For most of its existence, GBTC traded at a hefty premium to spot Bitcoin prices. But It started trading at a discount after the debut of the first North American Bitcoin exchange-traded fund (ETF) in Canada in February 2021.

Unlike an ETF, the Grayscale Bitcoin Trust does not have a redemption mechanism. In other words, GBTC shares cannot be destroyed or created based on fluctuating demand, which explains its heavily discounted prices compared to spot Bitcoin.

Grayscale's efforts to convert its trust into ETF failed after the Securities and Exchange Commission's (SEC) rejection in June. In theory, SEC's approval could have reset GBTC's discount from current levels to zero, churning out profits for those who purchased the shares at cheaper rates.

Grayscale sued the SEC over its ETF application rejection. But realistically, it could take years for the court to give a verdict, meaning investors would remain stuck with their discounted GBTC shares, whose value have fallen by more than 80% from their November 2021 peak of around $55.

*GBTC daily price chart. Source: TradingView*

Also, GBTC's 12-month adjusted Sharpe Ratio has dropped to -0.78, which shows that the anticipated return from the share is relatively low compared to its significantly high volatility.

*GBTC 12-month adjusted Sharpe Ratio. Source: PortfolioSlab.com*

Simply put, institutional interest in Grayscale Bitcoin Trust is drying up.

A warning for spot Bitcoin price?

Grayscale is the world's largest passive Bitcoin investment vehicle by assets under management. But it doesn't necessarily enjoy a strong influence on the spot BTC market after the emergence of rival ETF vehicles.

For instance, crypto investment funds have attracted a combined total of almost $414 million in 2022, according to the CoinShares' weekly report. In contrast, Grayscale has witnessed outflows of $37 million, which include its Bitcoin, Ethereum, and other tokens' trusts.

*Fund flows by provider. Source: CoinShares*

Instead, day-to-day fluctuations in the spot Bitcoin price are heavily driven by macro factors, at least for the time being.

*NDAQ versus BTC/USD daily price chart. Source: TradingView*

A stronger U.S. dollar also hurts Bitcoin's upside prospects, given their consistent negative correlation over the past year in a higher interest rate environment.

For instance, the U.S. dollar index (DXY), which measures the greenback's strength against a basket of top foreign currencies, has climbed over 113, its 20-year high, on Sep. 23. Similarly, yields on 2-year and 10-year U.S. Treasury notes have climbed to 4.21% and 3.69%, respectively.

*U.S. dollar index versus US 10-year and US 2-year Treasury yields. Source: TradingView*

Several on-chain metrics, however, are suggesting that Bitcoin could bottom out soon based on historical data. However, from a technical standpoint, BTC's price still risks a drop toward the $14,000-$16,000 area, according to independent analyst il Capo of Crypto.

*BTC/USD eight-hour price chart. Source: TradingView/Capo of Crypto*

Its more likely that [Bitcoin] will reject at the first resistance of 20300-20600," he said while citing the chart above, adding:

"Wait for the bounce, then exit all the markets."

Other Bitcoin analysts have thrown around even lower targets such as $10,000–$11,000, due to this being a historical high-volume range.

This Bitcoin long-term holder metric is nearing the BTC price ‘bottom zone’

September 22, 2022 Coin Telegraph

Bitcoin

Bitcoin accumulation is in full swing during the downtrend despite BTC price having more room to drop.

A Bitcoin (BTC) on-chain indicator, which tracks the amount of coin supply held by long-term holders (LTHs) in losses, is signaling that a market bottom could be close.

Eerily accurate Bitcoin bottom pundit

As of Sept. 22, approximately 30% of Bitcoin's LTHs were facing losses due to BTC's decline from $69,000 in November 2021 to around $19,000 now. That is about 3%–5% below the level that previously coincided with Bitcoin's market bottoms.

For instance, in March 2020, Bitcoin price declined below $4,000 amid the COVID-19-led market crash, which happened when the amount of BTC supply held by LTH in loss climbed toward 35%, as shown below.

*Bitcoin long-term holder supply in losses. Source: Glassnode*

Similarly, Bitcoin's December 2018 bottom of around $3,200 concurred alongside the LTH loss metric rising above 32%. In both cases, BTC/USD followed up by entering a long bullish cycle.

Hence, the number of LTHs in loss during a typical bear market tends to peak in the 30%–40% range. In other words, Bitcoin's price still has room to drop — likely into the $10,000–$14,000 range —for "LTHs in loss" to reach the historic bottom zone.

Coupled with the LTH supply metric, which tracks the BTC supply held by long-term holders, it appears that these investors accumulate and hold during market downturns and distribute during BTC price uptrends, as illustrated below.

*Bitcoin total supply held by LTH. Source: Glassnode*

Therefore, the next bull market may begin when total supply held by LTHs begins to decline.

Bitcoin accumulation is strong

Meanwhile, the number of accumulation addresses has been increasing consistently during the current bear market, data shows. The metric tracks addresses that have "at least two incoming non-dust transfers and have never spent funds."

*Bitcoin number of accumulation addresses. Source: Glassnode*

Interestingly, this is different from the previous bear cycles that saw the number of accumulation addresses drop or remain flat, as shown in the chart above, suggesting that "hodlers" are unfazed by current price levels.

In addition, the number of addresses with a non-zero balance stands around 42.7 million versus 39.6 million at the beginning of this year, showing consistent user growth in a bear market.

*Bitcoin number of addresses with a non-zero balance. Source: TradingView*

BTC price technicals hint at more downside

Bitcoin is nevertheless struggling to reclaim $20,000 as support in a higher interest rate environment. Its correlation with U.S. equities also hints at more downside in 2022.

From a technical perspective, Bitcoin could drop further toward $14,000 in 2022 if its cup-and-handle breakdown pans out, as shown below.

*BTC/USD three-day price chart featuring cup-and-handle pattern. Source: TradingView*

Such a move should push the aforementioned "LTH in loss" metric toward the 32%–35% capitulation region, which could ultimately coincide with the bottom in the current bear market.

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

September 21, 2022 Coin Telegraph

Bitcoin

In addition to a 0.75% basis point hike, the Federal Reserve also set its 2022 target interest rate at 4.4%, leading Bitcoin analysts to forecast further downside for BTC.

Bitcoin (BTC) retreated and reversed its intraday gains after the Federal Reserve announced its third consecutive 75 basis point (bps) interest rate rise on Sept. 21.

Traders sold the news

BTC'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: TradingView*

On 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 with 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 Bitcoin

The 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.

Bitcoin 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, 2022

Bitcoin'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.

Conversely, a rebound from the head-and-shoulders support level of $18,800 could have Bitcoin eye $22,500 as its interim upside target.

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

September 21, 2022 Coin Telegraph

Bitcoin

Polls suggest that the Fed is likely to raise rates by 75 basis points as Bitcoin price clings to $19,000.

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 decision

BTC'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: TradingView*

FOMC rate hike scenarios

The 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 1D

As 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, 2022

These 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/DailyFX*

Polls expect a 75 bps rate hike

The 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.

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: FRED*

Normally, 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: TradingView*

Conversely, 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 price

Bitcoin analysts give three reasons why BTC price below $20K may be a ‘bear trap’

September 20, 2022 Coin Telegraph

Bitcoin

A set of technical indicators see Bitcoin price ending its prevailing bearish cycle.

Bitcoin (BTC) recovered above the $19,000 mark on Sep. 20, a day after falling to its lowest level in three months.

Bitcoin struggles after dropping below $20K

On the daily chart, the BTC price rose from $18,255 to $19,650. This 7.5% price rebound mirrored similar rebound moves witnessed in the stock market, suggesting that investors have been coming to terms with another significant rate hike by the Federal Reserve expected on Sep. 20-21.

*BTC/USD daily price chart versus ACWI and Nasdaq. Source: TradingView*

However, opinions differ on the longevity of Bitcoin's rebound. Independent market analyst Jonny Moe stressed that BTC's ongoing price action is similar to its sideways consolidation moves at the beginning of this year.

In other words, Bitcoin's current price rebounds around the $20,000 mark do not make a long-term bull case.

This is definitely still lurking out there $BTC pic.twitter.com/UkJ4s312zS
— Jonny Moe (@JonnyMoeTrades) September 19, 2022

Rudy Takala, former Fox News executive and opinion editor at Cointelegraph, also warns crypto traders to prepare for more "dark times" due to worsening economic conditions globally.

On the other hand, some analysts believe Bitcoin is staring at a strong bullish reversal in the times ahead. Let's take a closer look at the three optimistic market outlooks.

Bitcoin prints "bullish hammer"

Bitcoin's Sep. 20 candlestick is a bullish hammer, which suggests weakening downside momentum, according to pseudonymous analyst Trader Tardigrade.

A bullish hammer candlestick forms when the asset drops significantly lower from its opening value but recovers to close near the same level. Traders see the hammer as a sign of bearish rejection, given its history of preceding market bottoms.

Trader Tardigrade applies the same theory to Bitcoin's recovery move on Sep. 20, noting that its bullish hammer may usher in a reversal.

#Bitcoin updates:

On daily chart, a “BULLISH HAMMER” candle was printed, which may bring us a reversal.

BULLISH Characteristics:
❇️ Long lower wick
❇️ White candle
❇️ Low below previous swing low

This indicates a strong price rejection below the candle.#BTC #Cryptos pic.twitter.com/8TkfoegZrb
— Trader Tardigrade (@TATrader_Alan) September 20, 2022

Pi-Cycle bottom

Another technical signal that anticipates Bitcoin to rebound sharply is the Pi-Cycle bottom.

Specifically, the open-source indicator tracks two long-term simple moving averages (SMA): the 471-day SMA and the 150-day EMA. History shows that Bitcoin price bottoms out for the market cycle when the 150-day SMA crossed below the 471-day SMA.

Meanwhile, the price heads for a strong bullish reversal in the days leading up to and after the 150-day SMA closes above the 471-day SMA. Pseudonymous analyst, Titan of Crypto, highlighted that Bitcoin is eyeing a 150-471 SMA bullish crossover sometime by 2023.

*BTC/USD weekly price chart featuring Pi-Cycle Bottom. Source: TradingView/Titan of Crypto*

"1st cross occurred in July," he noted, adding:

"2nd cross is yet to occur. Reversal might be closer than we think."

Wyckoff Cycle

Aurelien Ohayon, the CEO of investment strategy firm XOR Strategy, anticipates Bitcoin to reach $45,000 by early 2023, arguing that BTC price has been following the popular Wyckoff Cycle pattern.

A Wyckoff Cycle has four phases: accumulation, markup, distribution and markdown. After the markdown phase, the cycle repeats with the accumulation phase, which, as Ohayon points out, is the case with Bitcoin's ongoing price rebound.

*BTC/USD illustrated in the Wyckoff Cycle phases. Source: XorStrategy.com*

"Bitcoin is entering the Final Bullish Phase of the Wyckoff Cycle," the analyst concludes.

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

September 18, 2022 Coin Telegraph

Bitcoin

Bitcoin derivatives data also shows sentiment shifting in favor of a massive crash below $20,000, the current psychological support.

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/TradingView*

On 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 $12K

Bitcoin 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: Coinglass*

Overall, 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.

From 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: TradingView*

Conversely, 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.

Ether beats Bitcoin in risk-on rally

Bear fractal alarm

Institutional interest in Grayscale dries up

A warning for spot Bitcoin price?

Eerily accurate Bitcoin bottom pundit

Bitcoin accumulation is strong

BTC price technicals hint at more downside

Traders sold the news

All the metrics point to more pain for Bitcoin

BTC price hold $19K ahead of Fed decision

FOMC rate hike scenarios

Polls expect a 75 bps rate hike

Bitcoin to $14K next?

Bitcoin struggles after dropping below $20K

Bitcoin prints "bullish hammer"

Pi-Cycle bottom

Wyckoff Cycle

Bitcoin in "bottom phase?"

Options consensus see BTC at $12K

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