Michael Burry, the investor of “The Big Short” fame, is selling almost all of the assets in his equity portfolio and issuing a warning about a stock market crash comparable to the 2008 mortgage crisis. A document filed by Burry’s Scion Asset Management with the U.S. Securities and Exchange Commission (SEC) shows that he now […]
The post Big Short’s Michael Burry Ditches All Investments Except One, Says Economic Winter Incoming appeared first on The Daily Hodl.
Legendary commodities trader Peter Brandt says Bitcoin (BTC) is forming a classic bearish pattern, hinting at lower prices for the leading crypto asset by market cap. In a tweet to his 672,000 Twitter followers, Brandt says that Bitcoin is forming a rising wedge, a price action pattern that traditionally suggests an eventual dip to the […]
The post Legendary Trader Peter Brandt Says Bitcoin (BTC) Forming Bearish Pattern – But There’s a Catch appeared first on The Daily Hodl.
SOL price gained 75% in the past two months, but technical analysis suggests it could be an elaborate bull trap.
Solana (SOL) price rallied by approximately 75% two months after bottoming out locally near $25.75, but the token's splendid upside move is at risk of a complete wipeout due to an ominous bearish technical indicator.
Dubbed a "head-and-shoulders (H&S)," the pattern appears when the price forms three consecutive peaks atop a common resistance level (called the neckline). Notably, the middle peak (head) comes to be higher than the other two shoulders, which are of almost equal height.
Head and shoulders patterns resolve after the price breaks below their neckline. In doing so, the price falls by as much as the distance between the head's peak and the neckline when measured from the breakdown point, per a rule of technical analysis.
It appears SOL has been forming a similar bearish setup on its longer-timeframe charts.
On the weekly chart, the token has been forming the right shoulder of the overall pattern, suggesting a correction toward the neckline at $27 during the second half of 2022. Meanwhile, a breakdown below $27 could result in an extended correction toward $2.80.
In other words, a 95% price decline by the end of 2022 or early 2023, a setup also projected by pseudonymous analyst "PROFIT BLUE."
I will leave this here, now that it looks better.. #Solana pic.twitter.com/w03Y4Ffl8o
— PROFIT BLUE (@profit8lue) August 14, 2022
Solana's extremely eerie bearish setup appears as it closely tails trends across risk-on markets, mainly driven by the Federal Reserve's hawkish response to inflationary pressures.
For instance, SOL closed the week ending Aug. 14 at a 10.5% profit, similar to Bitcoin (BTC) and the benchmark S&P 500 index. These markets reacted to a softer-than-anticipated U.S. consumer price index (CPI), raising possibilities that the Fed would slow the pace of its interest rate hikes.
But many analysts have warned about these ongoing price rallies in the risky corners of the market, citing pieces of historical evidence of similar bear market bounces. So, SOL's 75% rebound risks turn into a fakeout if its correlation with riskier assets remains positive.
From a fundamental perspective, Solana also faces extreme FUD due to its recurring network outages and rumored centralization. However, the project's backers have introduced new upgrades to fix these issues, as Cointelegraph discussed.
But even then, a 95% price crash is too "wild," suggests market analyst IncomeSharks, saying that it would mean Solana is a rug pull project like Terra (LUNA) — now Terra Classic (LUNC).
Related: Fallout from crypto contagion subsides but no market reversal just yet
The next big drop could have SOL explore bounce opportunities near a multi-year ascending support trendline, as shown below.
In other words, SOL's bearish continuation could last until its price hits $20, down over 55% from August 16's price.
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.
“Up only” Bitcoin and Ethereum take a breather after encountering resistance at a stiff multi-month descending trendline.
On Aug. 15, Bitcoin (BTC) price and the wider market corrected while the S&P 500 and DOW looked to build on four-straight weeks of robust gains. Data from TradingView and CNBC show the Dow pushing through its 200-day moving average, a first since April 21 and perhaps a sign for bulls that the market has bottomed.
While equities markets have been strikingly bullish in the face of high inflation and a steady schedule of interest rate hikes, a number of traders fear that the current 32-day uptrend in the DOW and S&P 500 could be a bear market rally.
This week’s (Aug. 17) release of minutes from the Federal Open Markets Committee (FOMC) should give more context to the Federal Reserve’s current view of the health of the United States economy and perhaps shed light on the size of the next interest rate hike.
For the past month, overly bullish crypto traders on Twitter have also been touting a narrative that emphasizes Bitcoin, Ether (ETH) and altcoins selling off prior to FOMC meetings and then rallying afterward if the set rate aligns with investors' projected figure.
Somehow, this short-term dynamic also contributes to investors’ belief that the Fed will “pivot” away from its monetary policy of interest hikes and quantitative tightening after “inflation peaks.” This may be a somewhat profitable trade for savvy day-traders, but it’s important to note that inflation is currently at 8.5% and the Fed’s target is 2%, which is quite aways to go.
Ultimately, Bitcoin price maintains a high correlation to the S&P 500 so investors would be wise to avoid tunnel vision-like narratives that align with their bias and keep an eye on the performance of equities markets.
Over the weekend, Bitcoin made a strong move at a multi-month descending trendline and broke through the $24,000 level, following a path that many traders anticipated would trigger an upside move and the VPVR gap fill to the $28,000 to $29,000 level.
$BTC really looked like it was going to go last night - and now we have 2x outside brewing pic.twitter.com/gkyLodiXi6
— Cheds (@BigCheds) August 15, 2022
Trader Cheds said “BTC really looked like it was going to go last night” but the selling at resistance created an “outside bar” where “the prior trend was challenged” and according to Cheds, this is a sign that “the trend may be stalling and be on the look out for signs of further weakening.”
Bitcoin's Bollinger Bands are also constricted, a sign that a directional move is imminent but we've already seen expansion into the top band at the $25.6K trendline resistance. Is a $22.4K retest next before $BTC attempts to grind higher? Few have mentioned the falling wedge... pic.twitter.com/wi1VpGt2y7
— Big Smokey (@big_smokey1) August 15, 2022
Pseudonymous trader “Big Smokey” appeared to concur that a “strong directional move” could be on the cards, citing tightening in the Bollinger Bands and separately in the Super Guppy indicators as Bitcoin price drew close to the multi-month descending trendline.
There are some signs that a strong directional move is on the cards for Bitcoin: Super Guppy is getting real tight, possibly provoking a 26% pop to $28K before more sideways chop or downside to grab what will be new liquidity at the $24K s/r re-test by then... pic.twitter.com/1VgAkjj10o
— Big Smokey (@big_smokey1) August 15, 2022
In a separate chart, Big Smokey suggested that if the descending trendline is broken, Bitcoin could see “a 26% pop to $28K before more sideways chop,” resulting in an eventual retest of the $24,000 level.
After hitting similar overhead resistance levels, most altcoins also followed Bitcoin’s lead by posting single-digit losses, but those that were flashing bottoming signals are still rounding out with what appear to be reversal patterns.
Related: Shiba Inu eyes 50% rally as SHIB price enters ‘cup-and-handle’ breakout mode
Interestingly, on Sunday (Aug. 14) popular traders on Crypto Twitter prophesied that the sharp gains from meme tokens like Shiba Inu (SHIB) and Dogecoin (DOGE) were a clear sign that the bull phase was over-extended and en route to a correction.
Pulled this from the archives.
— Hsaka (@HsakaTrades) August 14, 2022
One year apart, same sector, different breed.
Time is a flat circle. pic.twitter.com/QplWWT43R5
Ultimately, after a 130% and 42.5% rally from Ether and BTC, each was poised for a bit of profit taking, especially at resistance. Open Interest on both assets remains near all-time highs, but what it will take to trigger BTC to breakout or breakdown at the multi-month descending trendline is unknown.
Perhaps a 1% rate hike, stiffer crypto regulations or a surprise turn-around in equities markets could send price tumbling back toward yearly lows. Alternatively, a successful Ethereum Merge could be a positive catalyst that triggers a high volume surge above Bitcoin's key resistance level.
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.
It's been more than a year, but investors continue to make allegations against Robinhood following the January 2021 controversy around trading GameStop and AMC stocks.
Cryptocurrency and stock trading platform Robinhood will allegedly face allegations of market manipulation as part of a class-action lawsuit brought by investors in “meme stocks” from 9 different companies during a January 2021 rally.
According to a Thursday report from Reuters, United States District Court Judge Cecilia Altonaga of the Southern District of Florida ruled that investors in GameStop, AMC, and 7 other unnamed stocks — which may include Nokia and BlackBerry — could proceed with a lawsuit alleging that Robinhood artificially increased the supply of stocks. In January 2021, the price of several assets including the meme token Dogecoin (DOGE) rose to then all-time highs after Redditors on r/Wallstreetbets pumped up interest in certain stocks and cryptocurrencies.
Robinhood suspended — but later resumed — buys of GME stock and others following the assets rising exponentially, putting the trading platform in the middle of a fight between retail investors and large hedge funds shorting stocks. Thousands of users left one-star reviews for Robinhood’s app on the Google Play Store, the platform put its plans for an initial public offering in the U.S. on hold, and individuals filed several class-action lawsuits alleging Robinhood was kowtowing to the involved hedge funds’ interests, given its ties to Citadel and Melvin Capital.
Today is the day that Robinhood stole from the poor to give to the rich. $GME $KOSS
— Betting Bruiser (@BettingBruiser) January 28, 2021
Following the meme stock controversy, Robinhood was sometimes the target of U.S. lawmakers looking for answers. CEO Vlad Tenev testified before a House Financial Services Committee hearing in February 2021. Unrelated to the events around meme stocks, New York Department of Financial Services also announced on Aug. 2 that Robinhood Crypto will pay a $30 million penalty to the state “for significant failures in the areas of bank secrecy act/anti-money laundering obligations.”
Related: Robinhood acquires British crypto firm Ziglu to push expansion plans
Following the release of Robinhood’s financial results for the second quarter of 2022, Tenev said he planned to lay off 23% of staff at the firm, saying cutting the workforce down by 9% in April didn’t “go far enough” to help the trading platform. At the time of publication, shares of HOOD are trading for $10.59, having risen by more than 26% in the last 30 days.
Cointelegraph reached out to Robinhood, but did not receive a response at the time of publication
Top US-based crypto exchange Coinbase is getting hit with a lawsuit alleging that the firm’s 2021 stock listing was based on misleading information. According to a recent court filing, a shareholder of Coinbase is suing executives from the crypto exchange for allegedly misleading investors into purchasing shares that were “materially different and substantially riskier” than […]
The post Coinbase Hit With Lawsuit From Shareholder Alleging 2021 Stock Listing Was Based On Misinformation appeared first on The Daily Hodl.
After last June’s inflation report published by the U.S. Bureau of Labor Statistics indicated that the Consumer Price Index (CPI) reflected a 9.1% year-over-year increase, July’s CPI data has come in lower with a year-over-year increase of 8.5%. Economists polled by media publications estimated that July’s CPI data would print 8.7%, however, July’s core CPI, […]
It's the largest quarterly net loss for the crypto company since listing on the Nasdaq Stock Exchange in April 2021.
Crypto exchange giant Coinbase has cited a "fast and furious" downturn of the crypto markets as the reasons behind a staggering $1.1 billion net loss in the second quarter of 2022, which also saw trading volume and transaction revenue tumbling.
It's the second consecutive quarter of loss for the crypto company and the largest loss since its listing on the Nasdaq Stock Exchange (Nasdaq) in April 2021.
The results, which also missed analyst expectations, were shared in a Q2 2022 Shareholder Letter from Coinbase on Aug. 9, stating:
“The current downturn came fast and furious, and we are seeing customer behavior mirror that of past down markets.”
Coinbase said that Q2 was a “tough quarter” with trading volume falling 30% and transaction revenue down 35% sequentially.
“Both metrics were influenced by a shift in customer and market activity, driven by macroeconomic and crypto credit factors alike," it wrote.
Despite the drop in transaction revenue, Morningstar equity analyst Michael Miller told Reuters in a report that while “Coinbase did not see a mass migration off its platform [...], its users are becoming more passive in their cryptocurrency investing”.
The crypto exchange reported $802.6 million in revenue, which was a 45.1% drop from the preceding quarter and a staggering 153.1% drop from the prior-year quarter. Its net loss, which amounted to $1.1 billion, was mainly driven by $446 million in non-cash impairment charges caused by lower crypto asset prices in Q2.
However, Coinbase wrote that despite the economic downfall, the company is doing its best to adjust to fluctuating market conditions:
In order to cut expenses and improve profit margins, Coinbase cut 18% of employees in June, and has also taken a “pause, maintain and prioritize” approach toward product development:
“Overall, it will take some time to fully realize the financial impact of our actions, but we have lowered our full-year expense range for Technology & Development and General & Administrative expenses.”
Among those products being prioritized include Coinbase’s Retail App, Coinbase Prime, Staking, Coinbase Cloud and other Web3 applications.
Miller however said noted that the “reduction is unlikely to restore profitability at current revenue generation levels”.
Related: Two more lawsuits for Coinbase: Law decoded, Aug. 1–8
Looking ahead, Coinbase said it expects the "soft crypto market conditions" from the second quarter to continue into Q3 2022. The company said it expects a further fall in total trading volume and average transaction revenue per user, though it said it may see some revenue growth from subscription and service fees.
Coinbase's share price fell 10.55% on Tuesday following the release of its Q2 results and is priced at $87.68 at the time of writing.
Traders tuck their tails as this week’s CPI print approaches and BTC and ETH price fall back into range to test underlying support.
Crypto and equities markets took a bit of a tumble on Aug. 9 as traders grew a bit skittish ahead of tomorrow’s Consumer Price Index (CPI) report. The details of the print will shine a light on whether the Federal Reserve’s aggressive interest hikes are effective in tamping runaway inflation and it could have an impact on the size of future hikes.
Earlier in the week, Tesla CEO Elon Musk suggested that July data will reflect the United States reaching peak inflation and that any recession will be “mild to moderate.” Right now, the consensus is that July data will be lower than the record-breaking 9.1% figure seen in June. The price of energy commodities (oil, natural gas) noticeably decreased in July and the Fed is hopeful that the previous back-to-back 0.75 basis-point hikes will combat soaring prices in other parts of the economy.
As is custom, Bitcoin (BTC), Ethereu (ETH) and most altcoins pulled back as traders de-risk ahead of the CPI print. BTC price dropped as low as $22,800, while Ether corrected to $1,670. The rationale that traders are sheltering in stablecoins is sensible, but from a technical analysis point of view, Aug. 9’s pullback is simply a lower support test after the most recent support-resistance flip of the past week, and large-cap assets like ETH and BTC continue to trade within their multi-week ranges.
According to independent market analyst Michaël van de Poppe, the fear surrounding the Aug. 10 CPI is “unwarranted” and once the series of retests is complete, BTC price should rally toward $28,000.
#Bitcoin correcting due to several reasons.
— Michaël van de Poppe (@CryptoMichNL) August 9, 2022
▫️ (Unwarranted) fears among CPI data tomorrow.
▫️ Resistance around $24.3K continuing being resistance.
Expecting to see a test around $23-23.2K to hold, so trend continues.
Another test of resistance -> break-out towards $28K. pic.twitter.com/hqcJ6Ry64c
Adding to the narrative that the current pullback is “expected”, trader @52kskew suggested that BTC’s price action is being impacted by a “healthy unwinding in perps” as spot Bitcoin is sold at a “logical resistance.”
$BTC Healthy unwinding in perps underway.
— Δ (@52kskew) August 9, 2022
spot being sold off at logical resistance. pic.twitter.com/Fj8hgSjDNV
Pseudonymous trader Big Smokey explained that the marketwide correction is simply “de-risking from traders awaiting this week’s CPI print.”
Just a lil de-risking from traders awaiting this week's CPI print. Up or down who knows, but some traders seem to be interpreting recent statements from the Fed + post CPI print market performance as a sign they've gone "dovish." Still swinging spot longs personally.
— Big Smokey (@big_smokey1) August 9, 2022
According to Big Smokey, the trend of traders “interpreting recent statements from the Fed + post CPI print market performance” as dovish continues and if this trend holds, the market could bounce if inflation figures are lower than June.
Analyst DyLeClair, on the other hand, believes that in the grand scheme of things, equities are in the “late stages of an equities bear market rally” and he suggested that BTC will sweep swing lows in the next six to 12 months if a “correlation 1.0 event” occurs.
i believe we are in the late stages of an equities bear market rally (if it's not already over)
— Dylan LeClair (@DylanLeClair_) August 9, 2022
BTC will not be catching a bid during a large equity market selloff
i have dry powder set aside for a correlation to 1.0 event that likely occurs over the next 6-12 months pic.twitter.com/Fx1iARy8ZO
The total cryptocurrency market capitalization now stands at $1.09 trillion, and Bitcoin’s dominance rate is 40.5%.
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.
Investors avoid risk assets during a crisis, but excessive cash sitting in financial institutions could also be good for the cryptocurrencies.
The U.S. Federal Reserve (FED) recently initiated an attempt to reduce its $8.9 trillion balance sheet by halting billions of dollars worth of treasuries and bond purchases. The measures were implemented in June 2022 and coincided with the total crypto market capitalization falling below $1.2 trillion, the lowest level seen since January 2021.
A similar movement happened to the Russell 2000, which reached 1,650 points on June 16, levels unseen since November 2020. Since this drop, the index has gained 16.5%, while the total crypto market capitalization has not been able to reclaim the $1.2 trillion level.
This apparent disconnection between crypto and stock markets has caused investors to question whether the Federal Reserve’s growing balance sheet could lead to a longer than expected crypto winter.
To subdue the economic downturn caused by restrictive government-imposed measures during the Covid-19 pandemic, the Federal Reserve added $4.7 trillion to bonds and mortgage-backed securities from January 2020 to February 2022.
The unexpected result of these efforts was 40-year high inflation and in June, U.S. consumer prices jumped by 9.1% versus 2021. On July 13, President Joe Biden said that the June inflation data was "unacceptably high." Furthermore, Federal Reserve chair Jerome Powell stated on July 27:
“It is essential that we bring inflation down to our 2 percent goal if we are to have a sustained period of strong labor market conditions that benefit all.”
That is the core reason the central bank is withdrawing its stimulus activities at an unprecedented speed.
A "repurchase agreement," or repo, is a short-term transaction with a repurchase guarantee. Similar to a collateralized loan, a borrower sells securities in exchange for an overnight funding rate under this contractual arrangement.
In a "reverse repo," market participants lend cash to the U.S. Federal Reserve in exchange for U.S. Treasuries and agency-backed securities. The lending side comprises hedge funds, financial institutions and pension funds.
If these money managers are unwilling to allocate capital to lending products or even offer credit to their counterparties, then having so much cash at disposal is not inherently positive because they must provide returns to depositors.
On July 29, the Federal Reserve's Overnight Reverse Repo Facility hit $2.3 trillion, nearing its all-time high. However, holding this much cash in short-term fixed income assets will cause investors to bleed in the long term considering the current high inflation. One thing that is possible is that this excessive liquidity will eventually move into risk markets and assets.
While the record-high demand for parking cash might signal a lack of trust in counterparty credit or even a sluggish economy, for risk assets, there is the possibility of increased inflow.
Sure, if one thinks the economy will tank, cryptocurrencies and volatile assets are the last places on earth to seek shelter. However, at some point, these investors will not take further losses by relying on short-term debt instruments that do not cover inflation.
Think of the Reverse Repo as a "safety tax," a loss someone is willing to incur for the lowest risk possible — the Federal Reserve. At some point, investors will either regain confidence in the economy, which positively impacts risk assets or they will no longer accept returns below the inflation level.
In short, all this cash is waiting on the sidelines for an entry point, whether real estate, bonds, equities, currencies, commodities or crypto. Unless runaway inflation magically goes away, a portion of this $2.3 trillion will eventually flow to other assets.
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.
