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Anonymous Kingdom: Bitcoin’s Lack of Transparency is Supreme

by with No Comment AMT MarketsCryptocurrencies & Digital AssetsFeatured Highlights

Anonymous Kingdom: Bitcoin's Lack of Transparency is Supreme

Bitcoin has fallen below the 40,000.00 USD price level today, and after penetrating the depth of 39,500.00 USD has shown additional velocity lower. Bitcoin is now testing support near the 38,850.00 ratio, a value it last tested on the 2nd of December.

Influencers will likely urge their fanbases to look at six-month charts to understand Bitcoin is still within the upper levels of its price range, this because a look at a three-month chart isn’t as cheerful. The speculative asset remains a dangerous place for day traders to participate who do not have legitimate insights regarding Bitcoin.

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BTC/USD Six Month Chart as of 23rd January 2024

The question that some are likely starting to ask is what happened to the bullish rush in Bitcoin that was evangelized as a source of inspiration when the U.S Bitcoin ETFs materialized? FOMO (fear of missing out) again became an ‘advert’ for Bitcoin. True patience is needed when investing in financial assets, but day traders aren’t investing they are speculating and BTC/USD is likely costing them plenty of money.

It has been publicized that BlackRock’s spot Bitcoin ETF now holds over 1 billion USD in funds. However, while BlackRock and other ETFs have added to their assets under management of Bitcoin, what are short positions within the ETFs regarding size? This number is elusive, but the ability to sell ETF ‘share’ value within the new Bitcoin funds being offered is said to exist.

Bitcoin’s open interest numbers within the CME’s future contracts was nearly 26,669 positions on the 11th of January, yesterday’s reporting via the Chicago Mercantile Exchange was 22,250 open positions. While day traders may be speculating on the price of BTC/USD via their brokers’ trading platforms, they have to understand that their wagers are not affecting the real market price. The big players within the Bitcoin market do not operate on brokerage platforms which are merely offering CFD positions. The large traders are using cryptocurrency exchanges, futures and options via the CME, and now ETF positions.

Unless a trader is actively selling Bitcoin on a selected cryptocurrency exchange – and likely being asked to open a margin account – and thus opening the door to leverage and volatility, which it can be argued is designed to knock you out of the positions. You are going to find it difficult to actually sell ‘physical’ Bitcoin via short positions that are ‘manipulating’ the cash/spot market.

Bitcoin is a playground for sophisticated traders with plenty of cash to speculate and will continue to produce a world of extreme price volatility. On the 11th of January the price of Bitcoin jumped towards the 49,000.00 mark before declining. Bitcoin’s high early this morning was around the 40,150.00 ratio before stumbling the past handful of hours. Note, that open interest was at its highest on the 11th of January via CME futures trading information.

If you want to speculate (bet) on the value of Bitcoin as a day trader you should understand that you are participating in a marketplace that still doesn’t have the best of transparency. Yes, in most assets day traders are always competing against complex dynamics in which they have no control. However, speculating on BTC/USD is still being done almost blindfolded because of the lack of insights that is part of Bitcoin’s anonymous allure that many of its proponents love. We are still a distance away from transparency within the world of Bitcoin.

If traders can get access to volumes data – and the size of long and short positions being placed within the crypto exchanges they are using that helps. But because Bitcoin trading is still unregulated, and since there are many crypto exchanges operating you will only be getting small bits of information. The lack of information should worry day traders and serve as a caution sign.

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Horror Show to Come for Bitcoin and MicroStrategy?

by with No Comment Cryptocurrencies & Digital Assets

Horror Show to Come for Bitcoin and MicroStrategy?

How cruel do hedge funds want to be? Actually it isn’t about being cruel, it is about making money. And hedge funds have an opportunity they could be pursuing which will affect Bitcoin and MicroStrategy.

Bitcoin is traversing slightly above the 19,581.00 as of this writing. Michael Saylor, the CEO of MicroStrategy, announced a couple of days ago his company has bought 480 additional Bitcoin near an average price of 21,817.00.

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MicroStrategy is selling for around 164.30 via its listing on NASDAQ as of this morning. Because MicroStrategy holds 129,699 Bitcoin as of the 28th of June, the price of the company is certainly feeling the pressure of the bearish trend in Bitcoin. There is a direct correlation.

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Now how can you take advantage of that? Well you may not be able to as an individual, unless you have plenty of money to wager on a massive speculation. However, hedge funds do have huge amounts of money to bet, and they potentially could be setting the table for a ‘bloodletting’ in Bitcoin and MicroStrategy which could equate into a massive payday for the hedge funds.

Let’s say some analyst for one of the hedge funds who is quantifying numbers as part of their job, and is looking for potential weaknesses in the current world of financial affairs takes a long look at Bitcoin and MicroStrategy and smells an opportunity. Let’s for a moment, consider the possibility that if the hedge fund believes Bitcoin can sink further and wants to short the digital asset it might be a good idea. Combine that with the notion that MicroStrategy is under pressure and could lose additional value if Bitcoin falls in price. This would set the table for a hedge fund to short both Bitcoin and MircoStrategy.

A combined short on BTC/USD and MicroStrategy is a potential huge payoff. The ability of knowing exact short positions on Bitcoin, also correlates into projections regarding MicroStrategy’s outlook. It is the equivalent of a daily double horse racing strategy.

Considering that the market capitalization of Bitcoin is around 373.6 billion USD at this moment around a price of 19,581.00 per coin, this is not a massive amount of money if a handful of hedge funds were to combine in the endeavor of seeking erosion of value in Bitcoin and MicroStrategy.

A reduction in price of Bitcoin also will likely lead to more capitulation among ancillary businesses related to the digital asset. There is a definite fear of contagion among decentralized finance enterprises and some are wobbling already, expect more carnage.

There are no guarantees in trading. Risk is aplenty. However, hedge funds can create much more force in the market and a combination of efforts to seek havoc is actually a healthy part of the marketplace. Hedge funds are able to take risks because they have a better ability to absorb pain for longer periods of time than a mere speculator.

Hedge funds seek weaknesses and strengths and take advantage of errors in the system. Bitcoin and MircroStrategy are vulnerable and together they could sink further.

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Bitcoin Winter Threatens to Become an Ice Age

by with No Comment Cryptocurrencies & Digital Assets

Bitcoin Winter Threatens to Become an Ice Age

Many influencers within the digital asset world use the term ‘crypto winter’ as a way to explain the dramatic cyclical falls of value when cryptocurrencies prices crumble. The sun it is psychologically suggested, will shine again during summer, prices always heat up says the mantra.

However, the prices of the largest cryptocurrencies are suffering extensive erosion during this ‘winter’ storm. Although it may sound like a joke, a fear of a cryptocurrency ice age seems plausible. If values freeze too dramatically in the cryptocurrency world, will prices be able to thaw again?

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Concerns regarding the ‘evangelists’ like mantras of Bitcoin backers such as Michael Saylor, the CEO of MicroStrategy, are noteworthy. Perhaps Michael Saylor will be warmed by ‘summer’ prices again and see Bitcoin emerge higher, but many of his ‘followers’ are likely to get hurt if prices do not rebound soon. Clever quotes like Bitcoin is better than fiat currency. Bitcoin is scarce. Bitcoin can be taken anywhere in times of crisis, are all frequently heard. But these quips become rather shallow sounding and questionable, during these massive selloffs which can destroy an average person’s speculative pursuits if they have over leveraged on their wagers.

Some backers will certainly say people should not be speculating on Bitcoin, they should buy and hold. However its does appear any buying of Bitcoin is speculative. Anyone who decides to purchase Bitcoin should be willing to lose all of their money. Its history as a volatile speculative asset underscores this fact.

Influencers and backers will claim they are not responsible, and in many cases they are not, but fingers will be pointed and blame will be cast and evidence will be gathered. Class action lawsuits will certainly spring forth as people who lost money look for folks and companies to accuse of wrongs. Responsibility will likely have to be proven in a court of law. Lawyers are certain to make money from their work, they may be the only ones who are guaranteed financial success from Bitcoin.

The average costs of purchased Bitcoin is said to be around 23,500.00 USD within the current total supply of 19 million plus existing coins. The problem for BTC/USD is that it is below this average purchase price as of this morning by a rather steep margin as it trades near 18,400.00 per digital asset. Meaning many folks who bought Bitcoin now have a substantial loss. Yes, the buyers who paid too much can become ‘HODLers’, but will they really be able to maintain this stance?

Another noteworthy number, it should also be remembered that it is estimated around 3 million Bitcoins have been ‘lost’ permanently via the misplacing of cold wallet information, and the forgetting of passwords that are needed to access coins in hot wallets.

Consideration must be given to the costs of producing one BTC, which supposedly is around 26,000.00 USD currently. If the price of Bitcoin continues to struggle, at what point do miners say it no longer makes viable economic sense? The price of mining a Bitcoin is not about to get cheaper in this high inflation period as energy costs grow.

When does a real capitulation take place? Why is Bitcoin being so violent during the weekends? Why does some of the greatest volatility apparently occur on Saturdays and Sundays?

Now that the 19,000.00 price level has proven vulnerable, which is the next technical level BTC/USD could challenge? Price velocity is lightning fast. Many seasoned traders could historically say this shows that fear has taken hold in the marketplace, and that may be true. But typically the fear eventually runs into an intrinsic value for the asset which creates a pause. Traders seeking value can jump in and take advantage of the low prices and wait for summer to shine. However, Bitcoin has very little intrinsic value that can be quantified. So where is the price investors jump in?

Will the price of Bitcoin fall to 13,000.00 during this so-called winter? Could it become even worse? Who is going to jump in and buy Bitcoin if it continues to stumble and its price is as cold as ice?

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Silence Of Tether a Loud Warning in Crypto Trading World

by with No Comment Cryptocurrencies & Digital Assets

Silence Of Tether a Loud Warning in Crypto Trading World

Tether continues to trade below its stated target value of 1.0000 via its stable coin ‘mandate’, and its failure to attain the target for nearly a month may be a loud warning.

Failure to Maintain 1.00000000 value in Tether

USDT/USD is trading near 0.99892000 via a Coinbase quote as of this writing. The last time Tether traded above the 1.0000 level in a sustained manner was in the last week of April. Since the destruction of TerraUSD, USDT/USD has not attained its objective as a stable coin in a month and a half.

One of the Tether functions in the cryptocurrency world is to facilitate transactions for digital asset businesses. If a tech firm, for instance, were to initiate an investment for a project in the crypto world, they might ask for the equivalent of 1 million USD. This transaction via the funding in the investment is often paid for via a stable coin. Tether is a mainstay of these investment deals.

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Receiving Tether allows the business taking in the stable coin investments, to ‘know’ they hold what is supposed to be a nearly exact USD based exchange rate, if they decide to cash in their Tether if they need dollars to pay bills. The problem for USDT/USD currently is that the exchange rate is not meeting this need and expectation.

Yes, a crypto based business could say, ‘well, we know the rate is now 99 cents on the dollar, so we need to ask for more Tether to make sure we get the equivalent of our investment asking price in USD’. OK, good enough, but this creates complications that are unwanted.

The silence of Tether not trading at 1.000 speaks about a much more problematic possibility in the cryptocurrency world. What if USDT/USD is actually starting to show signs of fatigue? What if USDT/USD continues to incrementally lose a little bit of its value moving forward?

Where have the Speculators Gone?

Is it possible there are large speculative funds betting against Tether and shorting the stable coin with the belief it will continue to lose value? If funds are wagering against Tether and have the fortitude to maintain long term selling positions against USDT/USD, they could trigger big problems down the road if they are proven correct.

The cryptocurrency world is showing massive signs that speculators are not participating. While Bitcoin has been able to maintain some semblance of value, BTC/USD is still stumbling near lows and has not been able to create a large reversal higher. Bitcoin is struggling during this prolonged bearish trend. The mantra that cryptocurrencies are a hedge against inflation has proven brazenly false.

Even worse is that most of the other cryptos are struggling too. Ethereum continues to test lower values. As of this writing ETH/USD is near the 1674.00 ratio. Technical support levels are faltering and there appears to be no momentous wave of speculative zeal flourishing which is looking to buy into the digital asset world on the notion that cryptos are oversold. Cardano, Avalanche, Solana, Polkadot and Ripple are all struggling via their coins.

HODL mantra, Corporate Treasury and Hedge Funds

If speculators really have gone away, this leaves the folks who are die hard supporters known as HODL’ers (Hold on for Dear Life). It also leaves intriguingly major companies who have purchased some digital assets such as Bitcoin and cryptos such as Ethereum as ‘assets’ within their corporate treasury structures. There are also hedge fund companies that are holding cryptos as speculative investments. What if corporate treasury suddenly gets scared and decides to cash out of the digital asset world? Will the directors of MicroStrategy and Tesla get nervous and force sales of their digital asset holdings? Michael Saylor has repeatedly said no and that he will keep buying Bitcoin for MicroStrategy.

The lack of a rise in cryptocurrencies during this long bearish trend, and the notion that no massive reversal has been demonstrated during the large erosion of value the past two months is a potentially negative bad sign. Critical technical support levels have been tested repeatedly and their penetration lower is a loud screaming sign that something is going wrong from a short term speculative point of view. It doesn’t appear that we have reached the end of the downturn in cryptocurrencies yet.

If some deep pocketed folks are betting against Tether as a stable coin and believe its value will continue to dwindle without a fight upwards, the silence of USDT/USD recently in the digital asset world may prove to be vicious signal that worse is going to come for cryptos in the coming months.

Cryptocurrencies remain speculating. No matter what some folks say, digital assets over the long haul still have a questionable future via utilitarian capabilities and as their technology evolves. Corporate treasury and hedge funds who ‘invest’ in digital assets are speculating and they may pay a heavy price if they bet on the wrong direction.

The inability of USDT/USD to move back towards its 1.000 value is troubling. If speculators stay on the sidelines and do not participate in cryptos, corporations and hedge funds holding digital assets may be forced to start capitulating . Meaning they may start to sell. If directors of companies and speculative hedge funds start to get nervous about the long term outlook for Bitcoin, and Tether continues to loss value while it proclaims it is a stable coin – then darker days will come.

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Speculative Fatigue as Roller Coaster Turns into Crypto Pain

by with No Comment Cryptocurrencies & Digital Assets

Speculative Fatigue as Roller Coaster Turns into Crypto Pain

Global markets remain uneasy in the short term as financial institutions seek clarity and short term speculators take cover.

Thrill of the ride up turns into fear and lost money

Speculators have shown signs of fatigue in the cryptocurrencies markets. A fear of the long term bearish trend has proven expensive for many traders and is certainly threatening to keep many of the major digital assets within their lower price ranges as they bang up against important technical support levels.

New lows would not be surprising in the major digital assets in the coming days. While influencers may still be heard within the confines of social media, traders may be closing their eyes and ears to the optimistic sounds of ‘backers’ who proclaim now is the time to take advantage of lower prices which glisten across the crypto world. The sound of traders walking away can be imagined easily for the moment.

After being told the crypto roller coaster is safe and that steep climbs, the sudden falls and the rocketing higher of prices are normal and the expected outcome, the bearish trend in the cryptos seen since November of 2021 is hard to ignore. Having been told they will always be satisfied at the end of the ride, speculators have walked away fatigued and over the past two months: in April and May have experienced costly downturns if they have been pursuing the ‘promise’ of reversals upward. The sun is likely to come up again, but predicting the time frames is dangerous.

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Shadows caused by storms in TerraUSD and LUNA/USD have hurt the crypto marketplace regarding speculative confidence. Not only did the so-called stable coin TerraUSD lose value, it plummeted and is essentially dead in the water. The coin’s blockchain has been halted and most major exchanges have exiled it to the garbage heap. Having once traded at 1.0000, the last listing per CoinMarketCap is around 0.02694.

Oh wait, there is the ‘new’ Terra Classic to watch, but you shouldn’t. Apparently this is the re-launched version of LUNA/USD and a so-called ‘airdrop’ of Terra 2.0 was awarded to folks holding the now worthless Luna token. However, one has to ask who in their right mind would trust the Terra crypto team to deliver long term value? The word scam comes to mind, and while it is only the opinion of this writer, it might be best to ignore Terra completely and any project they offer to the public. The words ‘no shame’ come to mind.

As of this weekend many of the major cryptocurrencies including Bitcoin, Ethereum, Ripple and Cardano are stumbling near long term lows. Recent consolidation and headwinds do not offer much hope for speculative bullish traders and strong surges higher near term. If a short term trader wants to buy cryptocurrency at this juncture it may prove wise to cash out profits when they are delivered. No doubt long term buyers will have different notions and different risks considerations regarding their objectives and perceptions. Day traders however who are buying via exchanges and speculating on price fluctuations remain in short supply, and this is having an effect on values as the injured folks lick their wounds and try to recover.

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BTC/USD: Bitcoin Remains near Troubling Support Levels

by with No Comment Cryptocurrencies & Digital Assets

BTC/USD: Bitcoin Remains near Troubling Support Levels

The price of Bitcoin continues to create perilous adventures for short term speculators as it moves below 30,000.00, while threatening to flirt with even lower values.

BTC/USD is trading a couple of hundred dollars above the 29,000.00 realm as of this morning. After being able to consolidate and provide speculators with a more tranquil environment last week, Friday’s price action saw the 28,800.00 juncture challenged, this as the NASDAQ Composite also suffered a red slash of selling. However, as Friday came to a close Bitcoin recovered some of its value, along with the major indices. Yet, BTC/USD certainly did not create a sudden change of opinion among most traders. Its bearish trend remains the flavor of the month.

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This weekend has seen consolidation, but the past day has also brought an incremental decline again into Bitcoin’s trading landscape. This is not your grandparent’s speculative haven, BTC/USD trades all day and every day, there are no vacations. While this allows short term wagers for folks who need to feel the thrill of price action at all times, it also allows the same people to watch their money evaporate into thin air just like at a Las Vegas casino.

As BTC/USD hovers dangerously close to the 29,290.00 vicinity this morning, traders who lean towards technical perspectives and have long positions will likely not want to see Bitcoin break below the 29,000.00 price. Weekend trading for Bitcoin over the past handful of months, and for most of the major cryptocurrencies, has been a battlefield which has witnessed some of the strongest selling action during this long bearish trend which began in earnest November of 2021.

If the 28,800.00 price range were to begin having its values tested once again, this would not be a welcome sight for short term bullish folks who simply refuse to be short sellers. Long term holders of Bitcoin might relish what they consider lower prices and exclaim the digital asset needs to be bought. Folks like Michael Saylor may see current prices as a buying opportunity for his corporate treasury at MicroStrategy, but losses are mounting for many people and if Bitcoin continues to struggle the question arises if long term believers of Bitcoin may have to capitulate to create cash flow that has suddenly been hurt.

Short term traders need to contemplate the trend and the dangers that Bitcoin poses. Folks who decide to use leverage and are looking for dramatic price changes need to be braced for bad outcomes if the direction of Bitcoin goes against their wager. The choice of the word ‘wager is not a mistake, Bitcoin is a betting environment for day traders – simple as that. Yes, the right direction may be chosen periodically, but trading BTC/USD is not an endeavor which should be treated without careful consideration.