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Crypto News Updates

Bitcoin’s Open Interest Shows Retail Traders May Spark a Massive Movement

Bitcoin’s sharp overnight selloff came as its open interest on trading platform Bitmex ballooned – signaling that the benchmark cryptocurrency is about to see some immense retail-driven volatility.
This climb in open interest (OI) has also come about concurrently with a decline in Bitcoin’s CME futures volume, suggesting that institutional traders are beginning to move to the sidelines as retail traders take the crypto’s reigns.
Some prominent investors are now noting that Bitcoin appears to be a “textbook short” at the moment, suggesting that this imminent volatility may favor sellers.
Bitcoin Faces Harsh Rejection as Retail Traders Take Control 
Overnight Bitcoin saw a sharp plunge from the lower-$7,000 region, which marked the third rejection seen at this price level throughout the past couple of weeks.
The downtrend that came about subsequent to this rejection led BTC to break beneath the strong support that had been established around $6,800, leading many analysts to grow increasingly bearish on the cryptocurrency in the near-term.
There is an important fundamental trend to be aware of when considering the implications of this recent decline, with it apparently being driven by retail traders rather than institutional ones.
According to data from blockchain research and analytics firm Skew, open interest on Bitmex surged to multi-day highs just a few hours ago, with this rally coming about shortly after its OI dived when Bitcoin broke above $7,000 yesterday.
Image Courtesy of Skew
Interestingly, CME futures waned over the same time period, signifying that institutional traders are growing increasingly cautious of entering positions as retail traders begin driving the market movements.
Image Courtesy of Skew
This comes just over a week after CME futures rocketed alongside Bitcoin’s initial climb past $7,000 in early-April, with this movement apparently being driven by institutional buying pressure.
Will This Imminent Volatility Favor Bears?
Although institutional buying pressure tends to correlate with upwards price movements, retail trading volume – as indicated by open interest – can fuel movements in either direction.
Mark Dow – a prominent hedge fund manager and analyst – seems to believe that this volatility will favor sellers, as he noted in a recent tweet that the strong resistance Bitcoin faces in the lower-$7,000 region makes now a “textbook opportunity to short” the digital asset.
“Been saying… that bitcoin on the chart is facing massive overhead resistance. Based on this chart, this rn is a textbook opportunity to short,” he said while referencing the chart seen below.
Image Courtesy of Mark Dow
If Bitcoin’s open interest continues to grow as BTC hovers within the mid-$6,000 region, it will become an even greater possibility that a massive movement is inbound.
Featured image from Unsplash.
Source: Bitcoinist News

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Crypto News Updates

Ethereum at Risk or Losing Macro Uptrend Following Dire Price Decline

Ethereum has seen some notable overnight losses that have slightly outpaced those posted by Bitcoin and many other major altcoins, with ETH erasing a portion of the gains that were incurred as a result of its recent rally.
This downturn has led the crypto to decline beneath a key bullish trendline that had been previously supporting its price action, with this potentially proving to be a dire sign of what’s to come next.
This also comes as multiple traders note that they are targeting further short-term downside for the cryptocurrency.
Ethereum Reels Towards $150 as Analysts Flip Short 
At the time of writing, Ethereum is trading down over 4% at its current price of $153, which marks a notable decline from daily highs of $165 that were set at the peak of the crypto’s rebound seen yesterday afternoon.
This rally came about in tandem with that seen by Bitcoin and proved to be highly fleeting, with ETH and most other cryptocurrencies plummeting after BTC faced a strong rejection at $7,200.
Over a one-week period, Ethereum is trading down from highs of $175, and just set fresh lows at $152 earlier this morning.
Prior to today’s drop, the crypto had found significant support at $155, although bull’s inability to hold it above this level seems to point to some underlying weakness amongst buyers.
This has led one popular pseudonymous trader on Twitter to note that he is currently shorting the second largest cryptocurrency, with a near-term downside target set at $145.
Image Courtesy of Calmly
It is highly probable that Ethereum will continue closely tracking Bitcoin in the hours and days ahead, which means that this potential drop could hinge on BTC breaking below the support it is currently finding around $6,600.
ETH Breaks Below Key Ascending Trendline
One grim byproduct of this recent selloff is that Ethereum has declined beneath a critical ascending trendline that had been guiding it higher in the time following its capitulatory plunge to the sub-$100 region on March 12th.
Another popular trader on Twitter spoke about this trendline in a recent tweet, offering a chart showing that a sustained bout of trading below this level could lead it to drop another 10% before it finds some slight support.
“We might need a pump here to reclaim uptrend – would be a pity to retrace 10% to retest support,” he noted.
Image Courtesy of Teddy
This 10% near-term downside target highlighted on the above chart coincides closely with the target offered by the first aforementioned trader, indicating that a movement to this level could be imminent in the days and weeks ahead.
Featured image from Unsplash.
Source: Bitcoinist News

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Crypto News Updates

This Valid Head and Shoulders Pattern Could be Devastating for Bitcoin

Bitcoin

Bitcoin’s attempt to rally past the $7,000 region has proven to be fleeting, with the benchmark cryptocurrency losing its momentum beyond this point and reeling below the support that had been established at $6,800 in a sharp overnight movement.
This recent price action has led to the formation of a clear head and shoulders pattern – a signal that the cryptocurrency could be in for some serious losses in the days and weeks ahead.
Bitcoin at Risk of Losing All Bullishness Following Dire Overnight Decline
Currently, Bitcoin is trading down over 3% at $6,700, which is a hair below where the crypto had been trading at prior to the fleeting rally.
This upswing let the cryptocurrency to highs of over $7,200 yesterday, before it once again faced a rejection within the region.
Bitcoin has now been rejected within the lower-$7,000 region on three occasions over the past couple of weeks, and its inability to stabilize here is an overtly bearish sign that suggests this may prove to be a mid-term top.
This latest decline has also led BTC to reach a level that is critical for its mid-term market structure, as a failure for it to hold above $6,500 could invalidate all its subtle signs of bullishness and lead it to reel even lower.
One highly respected cryptocurrency analyst who trades by the name of “Flood” spoke about the importance of this level in a recent tweet, noting that he remains bull biased as long as BTC trades above it.
“I hate planning out multileg trades but probably something like in the next few days. I’m bull biased here unless we dump below 6.5k. Then it would be pretty clear invalidation,” he said while referencing the below chart.
Image Courtesy of Flood
Could This Technical Pattern Spark Another Capitulatory Decline?
Despite Flood’s tempered bullishness, it is imperative to keep in mind that the multiple rejections BTC has faced in the lower-$7,000 region have formed what appears to be a head and shoulders pattern.
Mohit Sorout – another popular analyst and trader – pointed to this strikingly clear formation in a chart, noting that H&S setups are some of the most reliable classical charting patterns.
“Valid HnS top on BTC… Contrary to what people might have you believe on here, HnS setups are one of the most reliable classical patterns especially on higher timeframes,” he explained.
Image Courtesy of Mohit Sorout
Unless bulls perpetuate a notable upswing in the days and hours ahead, it is possible that Bitcoin will see a sharp decline sparked by its weakening market structure.
Featured image from Unsplash.
Source: Bitcoinist News