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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.

postN64

Optimism in Challenging Conditions and Time Considerations

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Optimism in Challenging Conditions and Time Considerations

Traders by nature are optimists, after all they are wagering on outcomes they believe are valid with targets regarding future results. Global market conditions for the moment have created expensive price action unfortunately, this as plenty of day traders wagering on their perceptions have found out while whipsaw movements and fast velocity have taken place and caused losses.

The USD continues to create turbulent higher values among many major currencies it is teamed against as financial institutions exhibit risk adverse tendencies. U.S Treasury yields may be going up because the U.S Federal Reserve continues to sound alarms regarding inflation, but the last two weeks of trading globally have seen an influx into U.S Treasuries as a safe haven move. Another signal that risk appetite is poor among global investors is because while the USD has gotten stronger, gold has also risen in value.

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Gold Five Year Chart as of 26th Oct. 2023

And importantly, global markets are trading in conditions which are not considered normal. Many inexperienced people within financial institutions have not dealt with markets like the ones being battled now. High interest rates combined with risk adverse conditions because of concerns regarding an escalation of war conditions in the Middle-East are causing a storm of volatility. U.S stock indices are trading at mid-term lows, and this may continue to be a theme over the next few weeks and beyond, but certainly there are those among us who look towards sunnier days.

So what does an optimist do if they are a day-trader? Perspective needs to be questioned at all times by speculators, and bias regarding all insights by individuals need to be given consideration. A trader must make sure they are not trading based on noise which is coming from the media and tainted with hyperbole. A trader must also question their personal instincts making sure they are free of preconceived notions. Behavioral sentiment gets affected from many angles when market noise becomes loud. Looking for a quiet place to think about market direction is vital for everyone.

Speculators need to remain calm and stick to risk management tactics that prove effective even during chaotic trading conditions. A variety of ways to be involved with the markets directly exists for all, Forex, equities and indices, commodities, bonds are only some of the avenues. Traders can go long or short on their chosen positions, they can participate in the ‘cash’ markets, but can also participate in futures and options trading via time related duration.

Famous investors are known for taking advantage of lower values when fear is high. They look for value via fundamentals within assets with long-term track records. It is not an accident the USD is strong, U.S Treasuries are being sought, gold is being bought currently.

Trends are there to be found and can be taken advantage of by day traders who are looking for quick hitting outcomes, but they must proceed carefully. Because it is also important to acknowledge that no matter how bad circumstances sometimes look in the short-term, that a positive quality among we as humans is to seek optimism. There are reasons to participate in trades with a perspective knowing more tranquil days will come and the markets will grow calm again, markets can reverse and suddenly display risk appetite.