Bitcoin Shorts Get Annihilated, OI Drops by 50k BTC from Last Week

While Bybit Bitcoin’s futures had the biggest drop of 15.59% in OI, followed by Binance’s 12% in the past 24 hours, Bitfinex, FTX, and CME had the biggest increase of 12.81%, 11.54%, and 11.86%, respectively.

Bitcoin price surged to nearly $40,000 in a strong upwards move, late on Sunday or early Monday. This represents a nearly 36% jump in price since the $29,300 low last Tuesday.

While several factors like Alameda Research putting in a bottom by “buying a LOT” at the lows, Tesla CEO Elon Musk announced his bullishness for crypto, and speculation over Amazon’s potential involvement in the cryptocurrency sector contributed to this bullish strength, shorts have a significant part to play in this.

As we have been reporting for the past month, the funding rates on the perpetual contracts have been staying in the negative, with the market extremely short on BTC. At the same time, open interest continued to climb sharply.

And finally, an epic short squeeze happened.

In the past 24 hours, 102,558 traders have been liquidated for $1.14 billion, with nearly $945 million of it belonging to shorts, as per Bybt.

The figure is expected to be much higher given that Binance had stopped showing its real liquidation numbers and is currently accounting for less than 20% of all liquidations when it used to be about half, much like Bybit.

“Bitcoin shorts just got blown out. Quarterly basis popped from 5% to >10% briefly,” noted trader and economist Alex Kruger.

Amidst this, Binance and FTX have reduced their leverage offering from more than 100x previously to now only up to 20x. Andrew Kang, Mechanism Capital, said,

“Usually, big short squeezes like we saw on BTC today bleed out, but this continued upward momentum is pretty indicative of shorts/stables being price-insensitive buyers trying to scoop any liquidity they can.”

The result of this short squeeze can also be seen in open interest. Total OI on Bitcoin futures has crashed by 50k BTC — currently at 349.7k BTC from over 400k BTC less than a week back.

In the past 24 hours, OI on Bybit Bitcoin’s futures had the most significant drop of 15.59%, followed by Binance’s 12%, which leads the futures space. OI on Binance is now at 79.1k BTC, down from 101.37k BTC on June 20, which increased 78% in nearly a month as new short positions were opened.

Meanwhile, Bitfinex, FTX, and CME had the most significant increase of 12.81%, 11.54%, and 11.86%, respectively, as of writing.

In the case of Ether, Binance is the only with a decrease, of only about 3.67%, though, in OI. Total Ether OI is now 2.54 million ETH, down from 2.94 million ETH in less than a week. SplitCapital said,

“Make no mistake, the real pain won’t come from shorts rather the absurd amount of people that are parked all in stablecoins. They won’t chase till 40k breaks.”

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Author: AnTy

Bitcoin Block Time Soars to Highest Level Since 2010 After Hash Rate Crashes to 2-Year Low

Bitcoin hash rate has taken a drop and is now down about 70% from its all-time high in mid-May. With this latest drop, the hash rate has fallen to a two-year low last seen in July 2019.

However, it’s just a short-term block-interval inferred hash rate, and the actual drop is about 47%.

Still, this drop resulted in an average block time of more than 23 minutes, up from the regular 10 minutes, to mine a single bitcoin block, “the largest daily mean block interval since the very early Bitcoin days,” in 2010, noted Glassnode.

Only 58 Bitcoin blocks were mined throughout Sunday, representing a drop of 60% from the baseline of 144 blocks per day.

This, of course, led to daily bitcoin miner revenue falling 80% from $70 million in May to about $12.8 million yesterday. Miners were earning the same level of revenue in early November when the price of bitcoin was around $13,000.

The largest drop in hash rate is causing a significant decline in Bitcoin network activity, with the number of active addresses also falling off a cliff, reaching levels not seen since early 2019.

Even fee is extremely low, with average fees now 0.00021 BTC ($7.12), down from over $62 in late April, and able to keep stable during this whole ordeal.

As a result, the difficulty is expected to have a negative adjustment, which reached an all-time high on May 13 and has seen two downward adjustments since.

While one wants a quick difficulty adjustment after such a harsh drop in hash rate, the fact is when the hash rate drops a lot, blocks take longer to mine, so difficulty adjustment takes longer to come.

Adjustments are supposed to happen every 14 days, but the last adjustment was 16 days ago, and there are still 453 blocks to go. The difficulty adjustment is expected to be the largest downward ever, which should lower the block times.

This drop follows China’s crackdown on cryptocurrency mining. Such a big drop means China might have gone “almost entirely off grid already.” As we reported, Chinese miners are moving overseas, but this definitely provides a great opportunity for those with access to cheap energy.

Even JPMorgan strategies can feel the bullishness of it, saying, “the crackdown on mining operations in China should be considered as positive for bitcoin over the medium term as it accelerates a shift away from China’s high share in bitcoin’s hash rate, reducing concentration.”

While a real annoyance, 60-80% drop is “not fatal,” said Balaji S. Srinivasan, former Coinbase CTO, and General Partner at Andreessen Horowitz.

“In general, the global decentralization of Bitcoin mining shows a way to robustify against the famous Thanksgiving Turkey Chart. Even the Chinese state going after mining (not really a surprise) is only causing a temporary rise in block times. So far, pretty antifragile!”

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Author: AnTy

What’s Next for Bitcoin as Risk Reducing Continues with A Lack of Strong On-chain Buying Signals?

With $27,000 in the key area and Bitcoin dominance seeing a drop, altcoins can get a serious run-up.

After the 28% drop last week, Friday’s mid-month options expiry resulted in choppy price actions.

This was followed by the owner of Dec 100k Bitcoin options calls to reduce national exposure, selling 1470 contracts 100k call for about 313 BTC ($11.6 million) and subsequently buying 980 contracts 64k call for about the equivalent amount. At the same time, there was plenty of buying volume on the Jan. 29 options with $52k and $72k strikes. Denis Vinokourov of Bequant wrote,

“Motivations are obviously unclear, but if this downsizing of risk continues, it may filter through to the broader market confidence.”

Bitcoin has now established a consolidation range with key levels to watch $39,200 and $34,000. A daily close below $34k would confirm a bearish structure, while a daily close above $39,200 will confirm a bullish structure.

Currently, BTC is being traded with low leverage with funding calmed down, open interest skyrocketing, and the long-short ratio looking neutral.

According to the trader and economist Alex Kruger, $27,500-$27,000 is the key area, and if the price heads back down to 30K, this level can be breached to see $27k, but it will bounce back very fast to $50k.

For now, the market is “waiting for profit-takers and weak hands to be shaken out,” notes on-chain analyst Willy Woo. The analyst believes a rest on the higher time frame would be “very healthy for a next stage rally,” but this could take 1-3 weeks.

“I’m modelling a floor price around ~$29k (daily closing price) for a worst case lower bound in this consolidation,” said Woo, but he doesn’t see a blow-off top because “there’s far too much money coming in from strong HODLers.”

Institutional Flow Needed

According to JPMorgan strategists, the recent drop from $40,000 could bring on further losses. Unless Bitcoin “break out” above $40k soon, the team of analysts led by Nikolaos Panigirtzoglou wrote, the leading cryptocurrency could see an exodus of trend-following investors.

Trend-following traders “could propagate the past week’s correction” and “momentum signals will naturally decay from here up till the end of March” if BTC fails to break above $40,000, they said.

Bitcoin is in a similar position as in late November when it was testing $20k when flows of institutional investment into Grayscale helped BTC extend its rally, wrote the analysts. It is the demand for Bitcoin futures and Grayscale Bitcoin Trust that will determine BTC’s outlook, they added.

“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout to occur,” the strategists wrote in a note on Friday.

Time for Altcoins to Rally

While the leading cryptocurrency is taking a rest, with strong on-chain buying signals that drove this bull market not coming up so far, it has given altcoins the chance to rally as well, which is how the liquidity cycle works in the crypto market — “Huge rally on Bitcoin followed by a breakout on ETHBTC, then majors, the mid-caps and finally the small-caps,” noted HXRO Labs.

This can be seen in Bitcoin dominance, which has dropped from 73.7% on Jan. 3rd, last seen in July 2017, to 66.6% today. HXRO Labs added,

“BTC dominance broke through the wick high throwback level at 67.46% and is headed for a retest of the downtrend line below. It will have to navigate the 20 SMA shortly after. If both break, altcoins will be on steroids until further notice.”

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Author: AnTy

Crypto Fund Inflows Drop Significantly After December Record; Evidence of Profit Taking

Crypto Fund Inflows Drop Significantly After December Record; Evidence of Profit Taking: CoinShares Report

Still, weekly flows remain consistently positive, ever since May 2019.

Investment inflows in cryptocurrency funds and products saw a decline in the first week of January at just $29 million, a big drop from a record $1.09 billion in the week before Christmas, as per the latest report from the asset manager CoinShares.

Still, the surge in cryptocurrencies’ prices pushed the total assets under management (AUM) at a record $34.4 billion as of Jan. 8. But this uptrend in price also drove investors to take profit, with some investment products seeing outflows.

Meanwhile, weekly flows remain consistently positive, ever since May 2019, “highlighting what we believe is an increasing use as a store of value,” states the report.

CoinShares-Report-Weekly-Crypto-Asset-Flows-By Coin & Institution

CoinShares-Report-Weekly-Crypto-Asset-Flows

Source: CoinShares

Amidst this, there has been “much greater” participation in recent price rises as the investment product volume averaged 10.5% of total Bitcoin trading volumes.

Although these levels have not been seen since Dec. 2017, they have been much greater compared to net new assets at $8.2 billion in 2021 to 2017’s $534 million.

The profit-taking has been one of the reasons that drove the prices of Bitcoin BTC -1.09% Bitcoin / USD BTCUSD $ 33,780.31
-$368.21-1.09%
Volume 75.16 b Change -$368.21 Open $33,780.31 Circulating 18.6 m Market Cap 628.27 b
1 h CNBC’s Jim Cramer Halts Bitcoin Purchases; Lays Out Conditions for Market Re-Entry 2 h Finland Is Selling 2,000 Bitcoin Seized in A Darknet Investigation in 2016 3 h Grayscale Reopens Deposits for New Investors In Its Crypto Trusts; Excludes Ethereum & XRP
, Ethereum ETH 1.68% Ethereum / USD ETHUSD $ 1,054.48
$17.721.68%
Volume 37.7 b Change $17.72 Open $1,054.48 Circulating 114.23 m Market Cap 120.45 b
3 h Grayscale Reopens Deposits for New Investors In Its Crypto Trusts; Excludes Ethereum & XRP 4 h Crypto Fund Inflows Drop Significantly After December Record; Evidence of Profit Taking: CoinShares Report 6 h Bitcoin & Crypto’s ‘Biggest Sales Pitch is Scarcity vs Demand’ Says Dallas Maverick’s Owner, Mark Cuban
, and other cryptos down by 28.5% from last week’s top.

“Bitcoin is still up on the year and the current 22% crash won’t intimidate any of the new institutional money that just hopped onto the crypto bandwagon,” said Edward Moya, senior market analyst at OANDA in New York.

The AUM of the world’s largest crypto asset manager, Grayscale, rose to a record $28.2 bln as of last week, and CoinShares’ AUM climbed to $3.4 bln.

Inflows into Bitcoin investment products totaled $24.3 million in the first week of the year, while Ethereum accounted for $5.3 million. Compared to $15.6 billion pumped by investors into Bitcoin products, Ethereum inflows reached nearly $2.5 billion.

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CME, Binance, and Bybit Captures BitMEX’s 24% Drop in Bitcoin Futures Market Share

CME, Binance, and Bybit Captures BitMEX’s 24% Drop in Bitcoin Futures Market Share

Last week was a historical one for Bitcoin as the world’s largest digital asset smashed through $20k and hit a new all-time high above $24,000. Currently, in its price discovery mode, all the pullback BTC is seeing hasn’t taken us to even $21k.

This price action, the largest weekly percentage gain of 22% since April 2019, has pushed the volume on spot exchanges to over $10 billion for the first time in history.

Over $1 billion worth of short positions got liquidated in the futures market over just two days last week. Leveraged traders have also been upping their risk profiles while the premiums to spot continues to decline.

This week, another burst of volatility can be seen in the market as Bitcoin futures contracts for December expire on Friday. Interestingly, the

Bitcoin futures market had some significant changes this year. The popular derivatives platform BitMEX, which commanded 34% of the market share at the beginning of this year, is the biggest loser of 2020. Currently, BitMEX occupies just 10% of the Bitcoin futures market, as per Arcane Research.

This 24% loss in the market share has resulted from the U.S. Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ) charging the exchange and its founders in October with illegally operating a crypto derivatives trading platform. These civil and criminal charges resulted in the exchange losing its edge in the market.

Open interest on BitMEX is currently around $720 million compared to more than $1 billion on OKEx, CME, Binance, and Huobi. BitMEX’s loss resulted in Binance, CME, and Bybit’s gain as all three of them strengthened their position in the market this year.

The biggest gainer is Binance, which recorded an increase of 12% in its market share. With a 9% jump, CME comes behind the leading spot exchange, but this regulated platform has more OI at $1.43 billion compared to Binance $1.38 billion. CME mainly sees increased traction thanks to all the institutional attention towards BTC.

Bybit’s OI is hovering just under the $1 billion mark; the platform now captures 11% of bitcoin futures market share, up from only 6% at the beginning of this year.

Among the losers, Huobi lost 4% of its market share while OKEx’s dropped 8%, although the latter has the highest OI at $1.53 billion, as per data provider Skew.

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Author: AnTy

Bitcoin Uptrending on the Weekend; But Not Everyone Wants to Bet Against the Brute Force of Billionaires

After yesterday’s drop to $17,600, today Bitcoin is back around $18,500.

Given it’s the weekend and the Bitcoin market is being led by US investors, with only $2.44 billion in ‘real’ volume, BTC is keeping around $18,450.

“Bitcoin looks like it could be ready to range higher over the weekend,” noted Hxro Labs. “If it manages to break into the VPVR value area around $18400, expect to see it trend up to the Point of Control ($19,086) shortly after.”

Compared to Bitcoins’ gains, ETH only managed to get to $560 while other altcoins are rallying much harder, including BASE (132%), NEM (25%), HAKKA (20%), YFI (12%), AAVE (11%), Monero (10%), IOTA (9%), Cardano (7%), and Litecoin (6%).

However, it’s still not known in which direction Bitcoin will move next. Many expect the pain to continue and even get us a better ‘buy the dip’ opportunity, while others expect the momentum to take us upwards.

As one trader noted, “One of the reasons I forfeited on the idea to get another significant short position is that I don’t want to be betting against brute force of billionaires.”

It has only begun

2020 for Bitcoin has been all about institutions; everyone wants a piece of the largest digital asset. It’s just that a few of them have revealed their positions while many are expected to be doing it without public disclosure.

“Reality is that I don’t know what will happen from here. Big cash flows are entering Bitcoin. Technicals that say downside is possible can be blown out of the water, whilst we should also not forget that institutionals don’t dictate bitcoin entirely, yet,” wrote the trader on Twitter.

Wall Street legends Stanley Druckenmiller, Paul Tudor Jones, Bill Miller, and others like Mexican media billionaire Ricardo Salinas Pliego have been endorsing Bitcoin. After influential money manager Rick Rieder said Bitcoin “is here to stay,” Larry Fink, CEO of BlackRock, also noted that this untested and small market has “caught the attention and imagination of many people.”

However, “the adoption of Bitcoin by institutional investors has only begun,” as written by the analyst team of JPMorgan led by Nikolaos Panigirtzoglou.

Christian Armbruester, the founder of Blu Family Office, a London-based investment firm for wealthy clients, told Bloomberg that he wishes he’d bought more BTC, which he dabbled in a few years ago.

“We’re now looking for trading opportunities in a very exciting field,” said Armbruester, who manages $670 million for Blu Family Office.

Thanks to currency devaluation

This traction has been particularly the result of central banks and governments flooding economies with cash and dropping the interest rates to zero and sub-zero to address the coronavirus pandemic.

As we reported this week, first, ECB announced a $600 billion COVID-19 stimulus only for German Chancellor Angela Merkel to unleash another monstrous fiscal stimulus package to pump €750 billion directly into the economy, the very same day.

“Normally in times of crisis people run to cash but who in their right mind wants to be cash-rich at a time when major economies are devaluing their currencies?” says Kevin Murcko, the founder, and CEO of CoinMetro, an Estonia-based crypto exchange.

Even Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, said cash is trash and bitcoin can act as an “interesting” investment diversifier.

“You could say that Covid-19, the U.S. election, Brexit, and, well, the entirety of 2020 have altered the way many in traditional finance view the value of digital assets,” Murcko added.

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This Altcoin is Beating Bitcoin With its 2020 Gains & Development Activity

It was mid-August that LINK set its all-time high at about $20. After over a 62% drop in the subsequent month’s price, the digital asset started pacing up a bit.

Just a couple of weeks back, we were around $15.7 only to get down to $13 today. The latest LINK price decline coincides with the percentage of LINK supply held by the top 10 largest whale addresses. The whale supply first started declining in November and continues into December.

Simultaneously, the network growth in terms of new addresses created has picked up, as per data provider Santiment.

Still, among the top digital assets, LINK is the biggest gainer with about 630% gains YTD compared to Bitcoin’s 167%, Ethereum’s 355%, and XRP’s 217% year-to-date performance.

However, in the past 30-days, LINK recorded 12% greens only while falling 8% in the past week.

Like the price, LINK is ahead of Bitcoin in terms of daily activity rate, although ETH development activity makes it the dominant project.

image1
Source: Santiment

The popular decentralized oracle network works as middleware — a bridge between smart contracts and the outside world while providing a security framework for protecting against any single point of failure.

Chainlink recently revealed that its platform enabled 77 different smart contract use cases. Chainlink offers Pre-Built Decentralized Price Feeds, Verifiable Random Function (VRF), Modular External Adapters, and several additional oracle services.

The project offers developer tools to deploy various oracle networks and solutions to implement highly-technical smart contracts,

“particularly those that execute based on market data like FX rates, interest rates, asset prices, indices, and more.”

Chainlink’s solutions are also used to support real-world assets, tokenized portfolio management, credit default swaps, bonds, synthetics, and futures.

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Author: AnTy

New Smart Money Buying Bitcoin Rally; Selling Pressure Entices Bargain Hunting Flow in DeFi

Over the weekend, Bitcoin’s price took a drop of about 8.5% to the $14,400 level. This has the first meaningful retracement ever since the BTC price started trending up this month, going from $13,000 to almost $16,000.

Today, we are back on the move, going as high as $15,845, starting the week with greens of about 3% with $2.6 billion in trading volume.

“Nice recovery over the weekend with low volume but still no higher highs yet. Funding is still okay. We might be chopping a while here,” said trader CryptoSqueeze who has closed his long swing position for now, “until a more obvious pattern forms.”

Bottomed or Short Squeeze?

Up 113.50% YTD, Bitcoin has taken a rest from the recent rally, giving altcoins a chance to record some gains as well.

Bitcoin has no doubt beaten the traditional assets, gold (28%) and S&P 500 (8.63%), by a wide margin in year to date performance. But after many sessions of outperforming the rest of the market, Ethereum staged a dramatic run in the wake of positive news related to its PoS transition.

Additionally, the small-cap index is trading up 9.5%, now almost in lockstep with the large-cap counterpart, which has been up over 10% — in contrast to the performance in previous weeks where capital inflow was largely in the large-cap assets.

DeFi tokens have actually been the ones that recorded percentage gains in four figures. While TVL advanced back to the record highs, DEX Uniswap topped $400 million for the first time since early October.

The magnitude of recent selling pressure in DeFi assets has now “enticed plenty of bargain hunting related flow” with the most notable gainers, in terms of one-week performance including Aave (80%), Hegic (76%), SNX (61%), RUNE (54%), YFI (42%), CRV (26%), YFII (25%), and Uniswap (20%).

Who’s Buying the Rally?

Still, Bitcoin is the one that is only 30% away from its all-time high of $20,000 made during the bull run of 2017. But market participants believe BTC isn’t ready for that level yet and would “dance” around its current levels for a few weeks.

“I still think ur insane if u tryna macro long BTC over $15k,” said trader loomdart.

But according to on-chain analyst Willy Woo, it has been the high net worth individuals, the smart money, that has been buying this rally.

It is not just smart money but also new smart money, as seen in the rate of new investors coming in per hour previously unseen before on the blockchain, which is “seriously bullish.”

As we reported, recently Grammy-nominated rapper Logic also announced to his 2.4 million Twitter followers that he had made a ‘big investment‘ in the digital asset.

This can be seen from the average transaction value between investors taking a big jump upwards, the same as over-the-counter (OTC) desks.

“Bitcoin is still in it’s stealth phase of its bull run,” said Woo.

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Author: AnTy

Bitcoin Exhausted with ‘Major Market Driving’ Event Next Week

In yet another drop this week, Bitcoin fell even lower to as low as $11,390. Since falling to that level, we have recovered a bit to move back above $11,500.

These losses came despite the open positions in bitcoin derivatives hitting new all-time highs this week, both bitcoin futures and options markets now have a record open interest. OI in CME bitcoin futures also printed a new ATH with “Leveraged Funds significantly cutting long exposure.”

The next upwards resistance level for bitcoin is $14,000, according to Simon Peters, an analyst at eToro.

“If prices continue to climb, it will test investors’ mettle,” he said. “I would expect to see exchange inflows increase as investors look to crystallize their gains potentially. This could push the price back toward $12,000.”

Consolidation Phase

Meanwhile, Bitcoin’s drop saw the broad crypto market getting red with heavy losses resulting in wiping out $19 billion from the entire market.

Also, the funding rates in the altcoins went from “outrageous exuberance to negative funding,” in these last few days. “Now you can get paid to be long,” noted trader and economist Alex Kruger.

However, the likes of Augur (33%), Golem (29%), ICON (21%), Decred (6%), Komodo (5.39%), Wanchain (2.17%), and among others are the few altcoins still maintaining the gains.

As bitcoin struggles to get above $12,000 level, a push to the volatility higher has the Bloomberg Galaxy Crypto Index hovering at 600 level, which has been acting as resistance dating back to mid-2019.

For this index to see further increases this year, this level needs to be broken and remain above that. Moreover, the Moving Average Convergence Divergence (MACD) indicator entering a negative divergence indicates future gains are hard to come by in the short term.

Crypto Index
Source: Bloomberg

The good thing is the crypto index is in an uptrend, and the ongoing correction could be just a consolidation phase.

As we reported, it is the strength in the US dollar that is seeing every other asset dumping. The crypto market is also taking its cue from the USD, just like gold and other risky assets.

“Strong dollar gains are really weighing on all risky assets, and you’re probably seeing a little bit of exhaustion after rallying up to that fresh 12-month high earlier in the week,” said Ed Moya, senior market analyst at Oanda Corp.

Risk is High

The big event coming up that could further spell more losses for the bitcoin and crypto market is Federal Reserve Chairman Jerome Powell delivering a speech at Jackson Hole next week on August 27.

During this annual symposium, he will be talking about the central bank’s monetary policy framework, with a focus on a new inflation strategy.

“This has been the major market driver since July, bigger than the fiscal package and coronavirus statistics,” said Kruger. “All asset classes. This is all one big trade now.”

A similar opinion is shared by trader Cantering Clark who says the “headline risk is high” here given the relation Bitcoin, gold, and USD has been having.

However, if Bitcoin falls, that won’t be out of the norm as during the last bull cycle, from mid-2016 to the end of 2017, the largest digital asset had nine corrections ranging between 30% to 40%, only to make it’s way higher.

So, if history is any indication, these are just ‘buy the dip’ opportunities before moving onto new highs.

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Author: AnTy

Bitcoin & Gold Crashes as S&P 500 Races towards All-Time High

After making a bullish start of the week, by surging past $12,000 only to drop, bitcoin is continuing its descent. The largest digital asset has gone down to under $11,300 in red by 2.76% while managing $2.2 billion in ‘real’ trading volume.

These losses came despite the bullish news of billion-dollar Nasdaq-listed MicroStrategy becoming the first publicly-traded company to buy Bitcoin. The company purchased $250 million worth of BTC as a reserve asset in its search for yield and an inflation hedge.

However, digital gold is not alone in running the streets red. The precious metal is also falling; gold has been having a rough couple of days.

The Driving Force

After surging to its all-time high of $2,075 on Friday, the yellow metal has been on a pullback. Today, the spot price of bullion went down as low as $1,937 and is currently trading around $1,945.

“This is a rates driven correction. The bond market is in charge,” said trader and economist Alex Kruger. “Bond prices => yields => dollar => metals.”

Rates are the primary driving force behind not only those moves that involve the dollar but also for gold, he said.

“This is all BTC bearish. With a little luck can have some proper wicks lower to get some fills,” Kruger added.

This makes sense given that the one-month correlation between bitcoin and gold has spiked to an all-time high of 68.9% on August 7th, as per Skew. This has been exactly opposite of what’s going on with the one-month correlation of bitcoin and the S&P 500, which has fallen to 23.6% from ATH of 78.8% in early July 2020.

So, it’s no wonder that today’s equities market is enjoying gains, outpacing previously flying tech stocks. As yields went up, there has been a “rotation from tech to “epicenter” stocks,” akin to what has been seen in the Dow and small caps as well.

Equity Markets to ATH

S&P 500 is nearing its all-time closing high from February, just 0.38% down from the ATH, after White House officials and top Democratic lawmakers indicated on Monday that they were ready to resume talks on the new coronavirus aid package.

President Donald Trump also suggested he was considering a tax reduction for “middle income” earners. Moreover, Trump is closing the gap on Joe Biden’s presidential election opinion polls, which is working in the market’s favor.

On the coronavirus front, the number of new cases in the US has fallen 18% over the past 14 days. Meanwhile, Russia has registered the world’s first COVID-19 vaccine, said President Vladimir Putin today.

Bitcoin’s Time to Come

A combination of fresh hopes for another stimulus package and signs of pandemic spread slowing are boosting the stocks.

Even the bubbling tensions between the US and China, reignited by a dispute over TikTok, might not affect the markets much as Goldman Sachs analysts expect an estimated 1.2% decline in SPX for an unexpected $10 billion increase in US tariffs on China.

In contrast with bitcoin, the US Dollar has also recovered somewhat, currently at 93.43 from the lows of 92.50 from last week, last seen over two years back.

However, BTC is holding firm above $11,000; up 60.32% YTD and new highs could come soon too.

“Bitcoin’s 4 Year Cycle suggests that it will be in 2021 where we will see peak euphoria and a new All-Time High for BTC,” said analyst Rekt capital. “In 2021, simply holding Bitcoin will be the most optimal investing strategy.”

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Author: AnTy