BTC
ETH
XRP
BCH
LTC
Change theme

Analysis

Tuesday Inferno market report

TL;DR volatility returns, with gradually increasing volume?

After last week’s promising breakout, bitcoin took a dive and is now back within its range. With the failure to make higher highs, we’re back to the previous rules: resistance at $6,400 and $6,200, with $6,000 being the established demand zone. Should the price drop to ~$5,700, we’d say it’s time to short – as ever, though, do your own research.

At the time of writing, BTC stands at $6,275. Volume is up a little; while it’s still pretty lacklustre, the direction of travel is right at least. Coinmarketcap is showing aggregate volumes into the $4 billion range (check the Historical Data tab for Bitcoin). While we’d like to see figures much higher, a large proportion of the last three months have seen lower volumes than that.

Meanwhile, BCash is retracing hard after its pre-fork pump, which looks like nothing more than your traditional crypto P&D. It seems that this event may have brought some interest to the overall crypto space, as traders purchased BTC to buy BCH – which are now being sold again. Craig Wright has stated his aim to kill BCH entirely. He claims he has over 50% of network hashrate at his disposal, meaning he could destroy BCHABC (Ver and Wu’s chain) and ensure his own BCHSV survives. Needless to say, the futures market has been volatile, and given that Wu has a lot of Bitmain hashrate to draw on, it could all get very ugly. Wright has threatened legal action of Wu moves Antpool hashrate to counter-attack.

Just another day in crypto. Most likely we’ll need to wait until after the fork happens and all of that mess plays out before the situation for BTC itself becomes clearer. You can read our rundown of the BCH fork debacle here.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Friday Inferno market report

TL;DR Positive for now, but it’s all about $6,800

 

After a long period of uncharacteristic stability, bitcoin is finally picking up. There are several reasons for encouragement, but a trend-change – a renewed bull market – is not certain yet.

 

On Wednesday bitcoin closed above the 50 daily MA for the first time in weeks. That area ($6,450) broadly lines up with a key support/resistance level, so remaining and consolidating above that will be important. For now we’ve dipped below that to $6,400, coming off the 50 and 200 MAs (which have just crossed bullish) on the 4h chart.

 

We have broken through the descending resistance line that has been in play since February. Bitcoin has tested this multiple times, as it has tested the $6,000 zone.

 

Volume is coming back in. It’s nothing like it was at the height of the rally or earlier this year, of course – but it’s picking up.

 

Bitcoin dominance is down. This is something that die-hard maximalists will view as a bad sign. For us, it’s a signal of strength for the overall crypto market. In a bear market, traders seek safe haven in BTC, assuming they don’t exit to USD altogether. This is why alts have typically fallen ~90% while bitcoin is down ~65%. When confidence returns, traders buy alts – pushing those thinner markets higher and reducing dominance, but indicating in the process that crypto is overall attractive.

 

For all that, bitcoin is still in a range and we know that $6,800 represents critical resistance. BTC has traded around that area enough in the past that it will necessarily be a key level in deciding trend. It may take a couple of goes to break that, if indeed the market decides that’s where it wants to go.

 

Additionally, bitcoin shorts have dropped to a three-month low against longs. This is not conclusive evidence of anything, but we take it into consideration. Longs have not picked up appreciably in cash terms. Remember that the herd is generally wrong. When shorts are high we often see a move to the upside, clearing them out. We’ll be watching this to nuance any technical analysis. Finally – and this will feel like Groundhog Day to anyone who’s been around since 2014 – China has just unbanned bitcoin. Again.

 

To summarise, passing $6,800 will be interpreted as a sign of strength, and many traders will be waiting for this point or $7,000 before buying.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Wednesday Inferno market overview

With the new month, bitcoin has still been trading within that very tight range. Just this morning, however, we may – may – have seen the first signs of green shoots as the price breaks out of its holding pattern. We will know more later.

 

November has historically been a bullish month for BTC and there’s some expectation that will happen again – but remember, we’re contrarians here at Inferno and when the herd thinks something is going to happen, the opposite is likely. Now we don’t know whether ‘the majority’ think things are bullish at this point – the evidence suggests not – but take what ‘everyone’ says with a grain of salt. In a market, nothing is definite.

 

Volumes are still low, but appear to be rising slightly, which will be a critical factor in determining the strength of any given move and how likely it is to follow through into the next stage of the cycle. Analysts are split on whether we are consolidating here ahead of a recovery in the final two months of the year – as we’ve said, bitcoin’s traditional Christmas rally – or whether we will break support at $5,700 and head into a long crypto winter. Remember, with low volumes, it’s easier for large players to push the market around, so a pick-up in volume is critical for the health of the ecosystem.

 

Right now, it’s still unclear which way things will go. Sunday saw a $100 leg up but BTC still sits within the established $200 range. We’ve just pulled above $6,500 at the time of writing, but there’s no telling whether that will be sustainable or whether it’s a fakeout. There’s support at the $6,200 zone, resistance around $6,500. If we close above that the scenario becomes more bullish.

 

As we suggested on Monday, the outcome of the midterms could have some bearing on what happens next, since this will impact the US financial markets – and those wider market conditions will likely play into whether bitcoin breaks up or down out of its nine month descending triangle pattern. If traders feel wealthy (due to a rally in the Dow, for example), they will be more prepared to put money into BTC. So it will be worth watching the stock markets and taking some cues from them. However, this is just one factor of many.

 

In the alts, there are signs of life. BCash has posted significant gains ahead of its fork mid-month. In previous such forks and similar events these rallies end before the fork itself as traders look to front-run each other ultimately selling the news. The same will almost certainly happen here – expect blood for BCash soon.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Friday Inferno market update

Is the picture finally changing for bitcoin?

 

Bitcoin has been trading in a very tight range for some time, bumping up against that daily 50 MA. We’ve seen a remarkable lack of volatility over the past three weeks, after the Tether-fuelled spike shoved the market out of its previous range and the immediate risk of breaking downwards.

 

As often happens – and encouragingly in this instance – the former resistance zone has now become support. On Wednesday, when bitcoin dumped from the $6,400 level at which it had sat for many days, it found strong demand at $6,200 and bounced hard.

 

Right now we’re at an interesting point in the cycle. We’ve had an 11-month bear market, with repeated strong demand at $6k. That large wedge on the chart that formed at the beginning of February has played out very reliably; $6k has been hit multiple times, as has the down-sloping ceiling. It’s textbook stuff. BTC is currently flirting with that sloping ceiling once again. There’s plenty of indecision in the air, with traders hoping for a break upwards – perhaps fuelled by the many new infrastructure projects coming online at the end of the year – but equally concerned we may break the $6k floor instead and take a leg down.

 

There are some anecdotal indications of OTC buys picking up as larger and institutional traders seek to capitalise on low prices (compared to the $20k peak). Plus those platforms like Bakkt and Fidelity, which will offer conduits for institutional money for the first time, will soon be up and running. So the picture is positive – especially the long-term picture, if you didn’t already know that.

 

But this is a market, people, and as we’ve often said, the market exists to make fools of as many people as possible. What the majority expect won’t happen – that’s a logical reality. In this instance, there’s enough uncertainty that we can’t take a reliably contrarian view, but we might imagine a few scenarios that surprise traders. A last shakeout, or a final plunge and period of consolidation at lower prices, is by no means unlikely. Is it also not unlikely that the launch of Bakkt would see precisely zero impact on the market in the short term – or even desperate traders selling the news and inducing capitulation or further loss of confidence. We have to add to this picture the instability in the global stock markets and the degree to which bitcoin is treated as a risk-on asset now (which we recently explored in more detail).

 

What we’re saying is that bitcoin’s period of stability will end, soon. And we know how this story ends. We just can’t say what the plot twists will be between the two.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Tuesday Inferno market report

BTC has been extremely stable – almost too stable. Yesterday that changed, at least a little.

 

The past two weeks have seen exceptionally low volatility. In fact, given the critical narrative over the course of 2018 that bitcoin is too volatile to have any meaningful use case, it is ironic that it has been more stable than the Dow Jones or Nasdaq, both of which have posted corrections recently. We have not seen such a period of stability since 2016, and the last weekly candle had less than a 2% range. Price has been confined to within $100 or so.

 

That changed somewhat yesterday, as sellers took over and BTC dropped sharply from $6,400 (Stamp) to just over $6,200, where it found its customary resistance and bounced back. It is currently trading around $6,250. This does not represent any significant development, since we’ve been here before already – many times.

 

Price has been bumping up against the daily 50MA for some time, but now sits below it; right now that 50DMA coincides with resistance at $6,400. It is also pushing right against the descending resistance line that has held since February, while the $6,000 floor established over the course of this year stays intact.

 

Of course, this situation cannot continue indefinitely – as we have noted repeatedly – and we must be reaching an endgame. Right now the most likely outcome appears to be more sideways, on low volume, with the market ‘breaking’ that down-sloping resistance level merely by drifting through it. $6k+ is the price the market has accepted for a bitcoin for a long time now, and it looks like further consolidation is on the cards. Smart players are picking up BTC at a price that has proven robust for many months.

 

Fundamentals haven’t changed and news isn’t making much difference. A bitcoin ETF still remains tantalisingly out of reach as the SEC’s process rumbles on. ICE/Bakkt will start trading BTC futures on 12 December. And the issues with Tether’s banking and the price of USDT seem to have been resolved. In all, the market is in ‘Wait’ mode. For what it’s worth, we believe this is where substantial opportunities lie – but don’t consider this trading advice.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Friday Inferno market report

TL;DR back to calm, for now – but we’re waiting

 

The markets have calmed after their violent moves earlier in the week. Now that Tether has re-established a banking relationship, money is able to flow into and out of the ecosystem – albeit by obscure and exclusive channels – and so USDT is revaluing back to its normal levels. The premium on Bitfinex is closer to its historical range, though not yet quite back to normal. At the time of writing, it’s around $200.

 

All of this reinforces the narrative we expressed on Wednesday, which is that the massive spike in the early hours of Monday was a carefully-executed move designed to take full advantage of quiet trading, low liquidity, stable conditions and – importantly – that closed ecosystem for Tether, which left the currency at the mercy of supply and demand alone. You can see our full analysis of that event here.

 

Onwards. Today, we’ve just seen a fall back to the $6,350 level (we’re still using Stamp for now as prices are a more accurate reflection of bitcoin’s value). Once again we’re back to low trading volumes and it won’t take much to move the market. Next support is around the $6,200 zone, then the all-important long-term $6k zone. And, once again, indicators are back to neutral. This is a sideways drift, a market waiting for its next cue, whatever form that takes. We stand by our belief that resolution will come by the end of the month. Downward-sloping resistance is around the $6,500 level and there aren’t many days left before that meets the $6k floor. New information about the bitcoin ETFs – particularly the critical VanEck-SolidX one – should appear in another week, which may prove a factor, especially for short-term market direction.

 

In other news, Scandinavia’s largest bank Nordea is being investigated for laundering up to $175 million in dirty money. This comes after Denmark’s largest bank, Danske, was fined for laundering EUR 200 billion. The significance? Both banks earlier this year advised employees not to trade bitcoin, and in Nordea’s case banned them from acquiring BTC. A major exchange lost its banking relationship with Nordea, with money laundering concerns cited.

 

You can’t make this stuff up.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Tuesday Inferno market report

TL;DR Tether could be dying and the markets are going nuts.

 

Last week was a time of real tension in the crypto markets as bitcoin once again traded at a critical level and bears looked set to push prices lower. The crash at the end of last week badly rattled a market that was regaining confidence.

 

In the immediate aftermath, we saw a reduction of volatility and volumes after the spike down. There have been many warnings of further falls by analysts, perhaps by as much as the original crash – which would bring us down to year’s low at $5,800. Traders are terrified of breaching that level because that support has been established over the course of the whole year. There’s no clear floor below that and it could be a long way down – perhaps $4,500, perhaps even $3,000. The markets quietened to a dead calm, and it was obvious a sudden and significant move was on the cards.

 

But the move that occurred in the early hours of Monday morning was spectacular. Bitfinex led the charge, with prices firing $1,350 higher in the space of two hours. Bitstamp followed, often as much as $400-500 behind the USDT price. That soaring value wiped out the losses that scared traders so badly last week and then some, pushing the price as high as $7,721 on Bitfinex and $6,756 on Stamp – an insane $1,000 difference. When the dust settled, prices remained $200 up on Stamp: a good result despite the correction.

 

It looks like this was led by fear, not greed. Traders were dumping USDT rather than chasing BTC to the moon. What next? Well, that depends on the reasons for the jump in price. That violent move will have shocked many traders, as the previous plunge did, and all the more so that it happened in the night for the US and Europe. There is still a major question market over USDT. Did Finex pump BTC with its own Tether reserves? Was this insiders buying BTC before bad news about Tether gets out? At the height of that move, Tether was squeezed to $0.90. Or was this just one of those things that happens after a period of stability and low volumes, when the market makes up its mind and takes out a bunch of shorts on the way? In this instance, orderbooks were thin, there was plenty of shorts, and the move was so sudden that USDT didn’t have time to adjust. (This doesn’t seem likely, but it’s an explanation.)

 

As ever, we’re going to have to wait to see how this pans out because we don’t have enough information to make a good decision. Sitting on the sidelines would be advisable because we’re going to get a lot of volatility, but Tether is clearly not the way to do that right now.

 

In other news, Nouriel Roubini has been making lots of noise with his prepared testimony to Congress and a highly critical report about bitcoin, crypto and ICOs. Roubini appears to have become a little untethered himself. Many of his arguments are sensible and have at least a grain of truth to them, but he has become utterly rapid and his arguments are increasingly emotional.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Friday Inferno market report

Yet another surprise crash, but support still holds… just…

 

Bitcoin took a major tumble in the early hours of Thursday morning. After a rise on low volume (never a great sign) above the $6,600 mark, BTC abruptly plummeted by almost $400 (Bitfinex). On Bitstamp, the fall was heavier as traders panicked and sold into thinner orderbooks. From just over $6,500, BTC crashed down to $6,055 before bouncing.

 

There was not a strong recovery, and the subsequent 4h candle brought the price lower still. By this time it was heavily oversold on the RSI and stabilised, but the move will have badly rattled traders.

 

The reason for the crash isn’t clear but may well have been triggered by the faltering US stock markets, which took a 4% tumble just before bitcoin plummeted itself. Markets around the world followed suit. The immediate cause was fear of rising interest rates in overbought conditions – the US stock market has enjoyed a strong bull run for many years, and analysts have warned of a coming correction. Bitcoin, once an uncorrelated asset, appears to have been impacted by the same risk-off: it is just another asset that traders sell when they’re worried and want low-risk, liquid cash. This was an inevitable consequence of bitcoin being integrated into the mainstream financial system, and from now on we will likely have to factor in the knowledge that traders no longer treat BTC as the safe haven or counterplay it was once considered.

 

Having broken the immediate support level, we are once again looking at the $6,000 zone for support. Below this there is no established point at which traders will feel safe buying, so if it breaks $6k on volume then it could be a long way down. If there is one reason for hope, it is that bitcoin stopped, once again, on the gently rising support level we’ve seen it touch now five times since the summer.

 

In both the stock markets and bitcoin, we’ll need to wait out the week to get the bigger picture – whether this was simply an isolated correction from a market that had got ahead of itself, or whether it was the start of something worse.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Friday Inferno market report

Bitcoin has become stuck in a tight range, with little fluctuation outside the $200 band from $6,450 to $6,650. We know that won’t last forever, and the sense is of pressure building. Analysts agree that a significant move is on the cards – though of course, no one can guarantee whether that’s going to be up or down.

 

Our long-term, gently-rising support now stands at the $6,200 mark, while falling resistance has reached $6,800. Bitcoin cannot continue to oscillate within these constraints for much longer: as we’ve pointed out before, those lines converge at the end of October, and we wouldn’t expect the pattern to run its full course.

 

Bears are making much of the possibility of a catastrophic breach of support around $6,400, leading to prices in the $4xxx range; bulls are looking forward to our traditional end-of-year rally of 20-30%, which would take us back up towards $10k.

 

That’s all we really have to say on the technicals for now, but let’s look at a few remarks from key figures in the crypto industry:

 

CFTC Chairman and Donald Trump appointee J. Christopher Giancarlo – nicknamed ‘Crypto Dad’ by the community, says bitcoin is here to stay.

‘I’m not sure they ever come to rival the dollar or other hard currencies, but there’s a whole section of the world that really is hungry for functioning currencies that they can’t find in their local currencies. There’s 140 countries in the world, every one of them has a currency. Probably two-thirds are not worth the polymer or the paper they’re written on, and those parts of the world rely on hard currencies. Bitcoin [or another] cryptocurrency may solve some of the problems.’

 

Meanwhile Mike Novogratz, the founder of Galaxy Digital and well-known bitcoin bulls, has said he doesn’t think BTC will break $9k this year – having ten days earlier stated it was impossible for bitcoin not to hit $10k before 2019.

 

Venezuela’s President Nicolas Maduro has scheduled the public sale of the Petro for 5 November. The Petro’s wallet has been launched and its website is live. It’s one of the most hotly-anticipated ICOs of 2018 – though not, it has to be said, for the right reasons. At Inferno we are, as ever, leveraged long on popcorn for that one.

 

And finally, John McAfee has tweeted about his campaign (to save his sausage) for President: ‘Let’s be real. No sane person could believe I could ever become President. That’s not my goal. I want access to the National Stage for 18 months to promote what I believe is the only thing that can save us: The Blockchain, CryptoCurrency and the economic freedom they will bring.’

 

Meanwhile: Bollinger Bands tighten. Volume drops. Prices flatline. Wait for it…

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Tuesday Inferno market roundup

With the new Quarter, things are looking up for bitcoin.

 

Q4 began yesterday, and with it, renewed optimism in the crypto markets. Right now on a technical level, we’re consolidating at the $6,600 level, just below the critical resistance at $6,800. We need to break that decisively, ideally closing above $7,000, to confirm a trend change.

 

Bitcoin has been trading in a tightening range for the last eight months, with a baseline around $6,000 and the top gradually falling from $12,000 back in February to that $6,800 zone now. As we’ve noted before, it won’t be long before that descending line meets horizontal support, so traders are running out of time before they have to make a move. At some point very soon, the big decision happens: up or down. It’s never certain, but up is looking more likely.

 

Right now, RSI on the 4h and the daily are both neutral. Zooming right out, the last two consecutive quarterly candles have been flat. As this analyst writes, ‘The last few times we’ve gotten two quarterly close in such a tiny range was at the end of both bear markets.
I don’t really trade based on fractals, it’s just something interesting to watch.
Quarterly is still very bullish.’

 

Fundstrat analyst Tom Lee maintains that better infrastructure and institutional FOMO will drive BTC prices ‘substantially higher’ in the closing months of the year. Historically, November and December have almost always been bull months. Mike Novogratz has also commented that institutions may be reluctant to invest until they see some price recovery, with $8,800 and $10,000 being critical levels for confidence.

 

Bitcoin does appear to have bottomed out successfully at $6,000. However, if ‘everyone’ believes something is going to happen, it most likely won’t – as we’ve discussed before. Or, at the very least, there may be a counter-move first to shake confidence before that expectation plays out. Short-term trading is always risky, so hedge accordingly. But by the end of the year we’re confident the picture will be very different.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on
Telegram: https://t.me/crypto_inferno
Reddit: https://www.reddit.com/r/CryptoInferno/
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno
Steemit: https://steemit.com/@crypto.inferno

Like us on Facebook