Bitcoin closed the week with the second-largest red candle in its entire history, testing lows near the $47k price zone following an ATH of $64K recorded in the previous week.
Overall, this was a tough week for markets across the board. From stocks to cryptocurrencies, traders experienced an episode of collective panic marked by the rumor that Joe Biden would be preparing a bill to increase capital gains taxes by almost 100% for all those generating more than $1 million in profits.
BTC Registers Its Second-Largest Red Candelstick Ever
The news caused a widespread drop in the most important financial indices in the United States and other countries. And cryptocurrencies had an even worse reaction, with Bitcoin confirming its downtrend after breaking the support of a channel initiated in late 2020.
Today’s drop puts Bitcoin at $48,000 with lows of $47044, according to Tradingview data. For the first time, the 10-period moving average and the 55-period moving average are crossing to the downside, which could indicate that the bullish trend is getting weaker, at least temporarily.
BTCUSD Weekly candlesticks. Image: Tradingview
Bitcoin lost just over 5% in the last 24 hours, and 13% over the previous 7 days. With near $8.000 lost, this would be the most significant gross price decrease in history, even though it has seen worst declines in terms of price proportions. To put things in context, a $10 drop when Bitcoin was traded at $100 was proportionally worse than a $1000 drop when Bitcoin was priced at $60,000.
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Bitcoin Has Not Been This Oversold Since The 2020 Panic Episode of the COVID-19 Crisis
Indicators show that traders have not yet recovered from the panic episode of the previous days. Bitcoin has not been this oversold since mid-March last year, when fears of a widespread crisis due to the coronavirus pandemic drove markets to the subsoil.
The RSI is an metric that signals whether there is a balance between buyers and sellers. It is currently in the order of 25 points out of 100. That is, there are 25 people placing buy orders vs. 75 people placing sell orders for the same value.
BTCUSD with RSI Image: Tradingview
This means that traders are currently looking to exit their positions to increase their holdings of fiat, commodities, or perhaps even altcoins.
A similar sentiment is shown by the Crypto Fear & Greed Index, which is at its lowest level in a year, indicating that investors’ fear of losing money with Bitcoin hasn’t been this strong since the March 2020 crash.
Crypto Fear and Greed Index. Image: Alternative.me
However, a low RSI is -generally- a bullish sign. In theory, markets tend to achieve equilibrium after such periods of euphoria with a correction to the contrary.
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Recently layer 1 solutions like the Solana (SOL) and Cosmos (ATOM) have grown in prominence thanks to each network’s faster transaction times and lower fees when compared to the Ethereum network. An even greater focus has fallen on layer 2 solutions that can help Ethereum keep up with the competition as it continues its process of switching to proof-of-stake.
One project that has seen a steady rise in user activity and transactions over the past 2 months is Polygon (MATIC), a platform for Ethereum scaling and infrastructure development.
MATIC/USDT 4-hour chart. Source:TradingView
Data from Cointelegraph Markets and TradingView shows that since hitting a low of $0.26 as the market sold off on April 18, MATIC price has climbed 50% to $0.39 as adoption of this expanding L2 platform begins to ramp up.
Popular projects migrate to Polygon
Following the early February announcement that the Matic Network would be rebrand to Polygon as part of its effort to become the go-to L2 aggregator for the Ethereum network, the protocol has seen a significant increase in user and project adoption.
Polygon, the top #ethereum layer 2 is going nuts!
Integrations with Aave, Pooltogether, Sushiswap, Open Sea, Curve Finance, Decentraland, and loads of other big #defi applications.
TVL on Aave on Polygon nearing 1 billion. $matic undervalued
— Lark Davis (@TheCryptoLark) April 25, 2021
Since the rebrand, multiple decentralized finance (DeFi) and nonfungible token-related projects have made the decision to integrate with Polygon to take advantage of its fast, low fee environment.
Some of the more significant DeFi integrations include the decentralized exchange SushiSwap (SUSHI) and Curve Finance (CRV), while OpenSea, Decentraland (MANA) and Aavegotchi (GHST) are large NFT communities that now utilize the Polygon network.
On March 31, the popular DeFi lending platform AAVE announced that it was exploring “new scalability frontiers” with Polygon, and the subsequent launch of AAVE on the L2 solution rapidly grew to $1 billion worth of liquidy and more than 7,200 users just 10 days after launch.
A big day for @0xPolygon and the whole Ethereum ecosystem!
$1 BILLION in liquidity and 7.2k USERS on a single application, 10 DAYS after the launch!
Huge thanks to the amazing @AaveAave team and the whole Ethereum community!
This is just the beginning, stay tuned! pic.twitter.com/wqvoOLgNbT
— Mihailo Bjelic (@MihailoBjelic) April 24, 2021
DEX volume increases
Popular decentralized exchanges like Uniswap and SushiSwap were a major catalyzing force for the growth of DeFi and the cryptocurrency sector as a whole over the past year, demonstrating the importance of a properly functioning DEX for the growth of the ecosystem.
While SushiSwap is one protocol that has made integrations with the Polygon network along with numerous other blockchains, the QuickSwap DEX is a project that is solely focused on increasing available liquidity for the Polygon ecosystem.
QuickSwap liquidity and 24-hour volume. Source:QuickSwap
As seen in the charts above, liquidity and trading volume on QuickSwap saw rapid gains beginning in late February and this trend continued throughout March. Over the past two weeks, there has been a noticeable uptick in volume on the platform and this corresponds with the recent Polygon adoptions.
Increased activity on decentralized exchanges is partially due to the growing list of projects now available on Polygon. A quick scroll through the project’s Twitter feed shows a long list of recent integrations including IoTeX (IOTX), Everipedia (IQ), Gelato Network (GELATO), Just Bet (WINR) and Umbrella Network (UMB), to name a few.
Going forward, it’s likely that a growing number of Ethereum-based projects will look for a faster, low-fee environment that also allows them to stay on the top smart contract platform. If they shift to Polygon, there is a chance of significant upside potential and the current growth in MATIC price and the rising TVL of QuickSwap both serve as proof that the protocol is a strong layer-2 contender.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Tyler Swope, host of the Chico Crypto YouTube channel, is drawing attention to three altcoins with untapped potential.
In a new video, the crypto trader and analyst starts off his list with Ampleforth’s recently airdropped governance token FORTH. While Ampleforth’s AMPL token has been around since 2019, FORTH just launched and was quickly adopted by top crypto exchange Coinbase.
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Swope notes that Ampleforth geyser v2 contracts are coming out soon, likely right before Uniswap’s latest version launches on May 5th.
“Guys, their v2 is not released from AMPL yet. As seen from Alchemist coin (MIST), these contracts are shaping up to be game-changing multi-stake NFT (non-fungible token) vaults which just might tie into Uniswap v3.”
Ampleforth’s FORTH token is currently ranked 188 by market cap and sits at roughly a $356 million valuation.
The next undervalued asset Swope mentions is cloud-based integration program Unibright (UBT). The analyst dives deep to uncover an impressive likely partnership between CONA (Coke One North America) and Unibright. Swope posits that Unibright will aid CONA in tokenizing invoices in business applications.
Unibright holds a $247 million valuation at time of writing, ranked at 204 on the largest coins by market cap.
The last project Swope highlights is blockchain supply chain tracker Morpheus Network (MRPH), which services the global trading industry.
Swope’s research leads him to believe that Morpheus may be on the verge of locking in a partnership with Coca-Cola FEMSA.
Morpheus has the smallest market cap of the three assets, sitting at an $80 million valuation, at time of writing.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Elon Musk, the meme-happy Telsa billionaire who has helped bitcoin reach a $1 trillion market capitalization this year, continues to tease the cryptocurrency market.
The bitcoin price, after doubling through the first three months of the year, has struggled in April, losing over 10% of its value amid multiple warnings the “frothy” cryptocurrency market could be headed for a “major” correction.
With Tesla set to release its first set of results since adding $1.5 billion worth of bitcoin to its balance sheet (and promising to increase its holdings) on Monday, Musk has primed the bitcoin and cryptocurrency market for fireworks.
MORE FROM FORBESRadical New Bitcoin Price Model Reveals When Shock Bitcoin Rally Could PeakBy Billy Bambrough
Tesla CEO Elon Musk is well known for his market-moving bitcoin and cryptocurrency tweets with Musk … [+]able to add and wipe away billions of dollars in value from the bitcoin price in mere moments.
AFP via Getty Images
“What does the future hodl?” Musk asked via Twitter early on Saturday morning, an intentional misspelling of the word “hold” that refers to a popular bitcoin and crypto meme that originated in 2013.
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Bitcoin and cryptocurrency market watchers, highly attuned to Musk’s signals, will be paying close attention to any bitcoin or crypto-related statements in Tesla’s first-quarter earnings report, set to be released after the market close on Monday evening.
Musk’s fascination with bitcoin is also likely to get some airtime on the earnings call, possibly sending shockwaves through the sensitive crypto markets.
Musk has made a series of cryptic bitcoin and crypto-related Twitter posts in recent weeks, something he also did before Tesla announced its huge bitcoin-buy in early February. Musk has also regularly posted about the tongue-in-cheek meme-based cryptocurrency dogecoin, spurring it on to a mind-blowing $50 billion market cap—though he’s previously said his dogecoin posts shouldn’t be taken seriously.
The soaring bitcoin price led to reports Tesla could make more from its bitcoin bet than its core car business.
Tesla is “on a trajectory to make more from its bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020,” Wedbush Securities analyst Daniel Ives estimated in a late February note, putting Tesla’s unrealized profits at around $1 billion.
However, the bitcoin price has lost around $10,000 per bitcoin since then, a decline of almost 20% despite the likes of office giant WeWork announcing its support of bitcoin and many analysts predicting bitcoin will continue to climb.
Bitcoin rocketed to an all-time high of almost $65,000 per bitcoin in mid-April, soaring as major U.S. bitcoin and cryptocurrency exchange Coinbase made its hotly-anticipated market debut but falling back as the hype faded.
MORE FROM FORBESBitcoin Price Prediction: Why Bitcoin Could Rocket To $400,000 In 2021By Billy Bambrough
The bitcoin price has fallen back from its all-time highs of around $65,000 per bitcoin over the … [+]last week as hype around the market debut of major U.S. bitcoin and crypto exchange Coinbase fades.
Coinbase
The bitcoin and wider cryptocurrency slide, which has wiped $500 billion from the near-$2 trillion market over the last two weeks, has largely failed to dampen the spirits of many in the crypto community.
“I always try not to give price predictions, but if we do manage to hold here, it could provide nice support for the market to go higher,” Hunter Merghart, head of U.S. for the Luxembourg-based Bitstamp crypto exchange, said in emailed comments, adding the decline “could be viewed as bearish, especially after an event like the Coinbase direct listing where market sentiment and positioning seemed to be bullish.”
“We’re only down around 14% from all-time highs. Overall given the history of bitcoin volatility, I don’t think there’s too much to read into right now. This feels more like a potentially healthy pullback in the short term.”
Popular crypto YouTuber Lark Davis talked about Binance Smart Chain (BSC) many opportunities for investors. With its low fees and fast transactions, Davis believes this ecosystem provides the kind of experience that the people want.
BSC flagship product PancakeSwap (CAKE) has given its competitor a run for their money and even managed to “eclipse Ethereum” in terms of transaction volume, according to Davis. The analyst cited data from DappRadar that claims BSC outperformed Ethereum on this metric, at least for a 24-hour period.
Source: DappRadar
PancakeSwap experienced an all-time high number of users during the past week and registered some issues due to the high congestion. Davis said:
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Binance Smart Chain hit a an all-time of 8.5 million transactions. I think it is pretty obvious what we are seeing right here. People want exposure, they want to get into DeFi. They want to get into crypto and use the different products.
The analyst reiterated Ethereum’s disadvantages and the high number of users that have been price out of the platform. When it comes to adoption, the “numbers speak for themselves”. PancakeSwap’s native token trading volume sits at $1.1 billion in the daily chart. Ethereum DEX Uniswap record a similar number but has been lagging behind its competitor. David added:
I suspect that we’re going to continue to see Pancakeswap moving up the charts and becoming a more and more prominent decentralized exchange. The users are there. The daily volume’s there. Just the market cap is a bit behind in comparison to Uniswap which only does half the daily volume right now.
Binance Smart Chain (BSC) Expansion And New Opportunities
This ecosystem is anything but static and will be making an entry into other crypto trends, like non-fungible tokens (NFT). For that, they will launch the BSC Station to allow users to do auctions for these assets to a “wide” audience. The platform will also integrate a BSC Swap feature along with the NFTs.
This development will be supported by Morningstar Ventures, NGC, BSCPad, x21, and many others. Its growth could positively impact PancakeSwap (CAKE), and the other projects on Davis’ list, Refinable (FINE), and Smoothy Finance (SMTY).
Refinable seeks to leverage the NFT’s nascent period. Davis believes this project could “get a good share of the market”. The platform is supported by Mr. Beast, a YouTuber with 60.4 million subscribers, in cooperation with Binance.
The platform’s native token FINE will give power to their holders, the NFTs creators trading on Refinable. For example, FINE holders can increase the royalties and distribution of an asset and participate in the governance model.
Davis’ second project, Smoothy Finance (SMTY) is also doing some “serious stuff”. Users can leverage their swap feature with 0 slippages to trade different dollar-pegged coins. Davis added:
(…) this is the infrastructure that actually allows DeFi to work in a smooth fashion for people. It allows it to be a good user experience where you’re not getting crushed on fees, you’re not getting crushed on slippage and so this kind of product actually allows users to have that nice user experience.
Binance native token BNB is trading at $500 moving sideways in the daily chart. In the weekly and monthly chart, BNB has a 3.1% loss and a 113% gain in respectively.
BNB with sideways movement in the 24-hour chart. Source: BNBUSDT Tradingview
Toy brands Barbie and Hot Wheels owner Mattel Inc. is joining the NFT bandwagon.
Mattel Considering Issuing NFT
The non-fungible token (NFT) fever is showing no signs of simmering down as according to a recent report by Ledger Insights, Mattel – the parent company of popular toy brands such as Barbie and Hot Wheels – is considering exploring NFTs as part of branding strategy.
Replying to a question during the company’s Q1 2021 earnings call, Ynon Kreiz, CEO, Mattel noted:
“This is definitely an area where we see opportunity, especially when you think about the built-in fan base, the collector segment for classic evergreen brands that we own and we expect to see opportunities there.”
Via NFTs, Mattel is looking into tapping the budding NFT market which recently witnessed a steep surge in demand courtesy of numerous high-profile NFT auctions.
For instance, famous rock music band Kings of Leon recently released its latest studio album in the form of an NFT. Similarly, Beeple sold his art in the form of an NFT for a whopping $69 million at the time.
For the uninitiated, Mattel’s target audience primarily comprises children. While it is typically the parents that make the decision to buy any toy for their kids, children are essentially the ones that have an interest in the product. Should children get into NFTs at an early age, it would lead to the creation of a generation where NFTs not only become mainstream but also a part of everyone’s lives.
A comparison can be drawn with McDonald’s and its famed Happy Meals. Regardless of the fact if someone is a fan of McDonald’s, the vast majority of children love McDonald’s and its Happy Meals that include toy giveaways.
NFT Adoption Continues to Grow
Close followers of the cryptocurrency industry remember the recent NFT euphoria that firmly established its grip over the wider digital asset market.
As reported by BTCManager on March 6, Twitter CEO Jack Dorsey minted the first-ever tweet ever posted on Twitter on Ethereum-run NFT platform Cent.
In similar news, BTCManager reported that the NFT platform Ethernity would release Pele NFTs on May 2, 2021.
A Swiss fintech company is rolling out the first crypto exchange-traded products (ETPs) for Cardano (ADA) and Stellar Lumens (XLM).
21Shares AG is listing Stellar XLM ETP (AXLM) and Cardano ADA ETP (AADA) on the Swiss stock exchange (SIX Exchange) on April 26th with a base fee of 2.5% per year. It is also adding the two investment products to the Stuttgart and Dusseldorf multilateral trading facilities (MTFs).
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The firmsaysit is expanding its roster of crypto exchange-traded products amid rising interest in Cardano and Stellar Lumens. 21Shares says demand for its crypto ETPs soared by 200% since Q1 2021 as institutional investors allocate funds to institutional-grade and open-ended ETPs, driving the increase in new inflows.
ETPs track underlying securities and other financial instruments. Their share price is also derived from these assets. AXLM and AADA replicate the performance of Stellar Lumens and Cardano, respectively.
“Both AXLM and AADA ETPs will allow clients to diversify and gain exposure to cross-border transitions between any pair of currencies whilst Cardano will help running smart contracts using proof of stakes on a level previously not possible executing using your bank or broker. The ETP structure is 100% physically collateralised, segregated and replicates 1:1 the tracking of both crypto assets.”
Each unit of AXLM will be backed by approximately 40 XLM, and AADA by 16 ADA at launch. Coinbase will custody the firm’s Stellar Lumens collateral, while Kingdom Trust will custody the ADA collateral.
Stellar Lumens aims to provide a frictionless and low fee method of transferring funds and holds around a $9 billion market cap at time of writing. Cardano is a blockchain network rivaling Ethereum and holds a roughly $35 billion market cap.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Corrections in a bull phase are usually a bullish sign as they reduce the frothy excitement and allow stronger hands to enter the markets. However, the recent correction in Bitcoin (BTC) from its all-time high at $64,849.27 does not seem to have scared novice traders.
Data from DappRadar shows that decentralized exchange volumes have picked up in the last week as traders may have exited profitable Bitcoin positions to buy altcoins at their current rock bottom prices.
Another sign of interest in altcoins is the sustained high volumes in Dogecoin (DOGE), which remains the fourth most traded cryptocurrency by volume, behind Bitcoin, Ether (ETH), and XRP, according to data from CoinMarketCap.
Crypto market data daily view. Source:Coin360
The recent fall in Bitcoin witnessed selling from the small-to-medium sized whales, who dumped $100,000 to $1 million worth of Bitcoin on the exchanges. However, a positive sign is that the larger-sized whales have continued to accumulate during this period.
While the long-term bullish story remains intact, the near term could see some more downside. Generally, a correction does not end until the retail crowd throws in the towel and a state of fear grips the markets.
In such an uncertain atmosphere, let’s look at the top-5 cryptocurrencies that are likely to outperform the other major cryptocurrencies in the short term.
BTC/USDT
The bulls are trying hard to push the price back above the psychological level of $50,000 but are facing stiff resistance from the bears on every minor rise. This shows that the bears are trying to hold on to their advantage and extend the decline to the next critical support at $43,006.
BTC/USDT daily chart. Source:TradingView
The 20-day exponential moving average ($55,671) is sloping down and the relative strength index (RSI) is close to the oversold territory, suggesting the bears have the upper hand.
The BTC/USDT pair had formed an inside day candlestick pattern on April 24 and today, indicating indecision among the bulls and the bears. If the uncertainty resolves to the downside, the selling could intensify, opening the gates for a decline to $43,006.
On the other hand, if the bulls can push the price above $52,129, the pair could witness a relief rally that is likely to face resistance at the 20-day EMA. If the price turns down from this resistance, the possibility of a break below $47.459 increases.
This negative view will invalidate if the bulls push and sustain the price above the 50-day simple moving average ($56,870).
BTC/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows the bears have been selling on relief rallies to the 20-EMA. With both moving averages sloping down and the RSI trading in the negative zone, the advantage is with the bears.
If the bears sink the price below $48,664.67, the pair could drop to $47,459. A break below this support could resume the down move.
Conversely, a break above the 20-EMA will be the first sign that the selling has dried up and the bulls have a chance to extend the relief rally to the 50-SMA.
ETH/USDT
The bulls have once again defended the 20-day EMA ($2,235), indicating the trend remains strong and the buyers are accumulating on dips. Ether will now try to rally to the $2,545 to $2,645 overhead resistance zone.
ETH/USDT daily chart. Source:TradingView
A breakout of the overhead zone could signal the start of the next leg of the uptrend that may extend to $2,745 and then $3,000. The gradually rising moving averages and the RSI above 57 suggest the path of least resistance is to the upside.
Contrary to this assumption, if the price turns down from the overhead resistance, the bears will again try to sink the ETH/USDT pair below the moving averages. If they succeed, the pair may start a deeper correction to $1,542.
ETH/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows the pair has formed a head and shoulders pattern, which will complete on a break and close below the neckline. Such a move could pull the price down to the pattern target at $1,600.
On the other hand, if the bulls can push the price above $2,375, the pair could retest the all-time high at $2,645. Such a move will invalidate the pattern and the pair is likely to pick up momentum on a break above $2,645.
BNB/USDT
Binance Coin (BNB) is currently consolidating in an uptrend. The bulls are buying the dips to the $480 support while the bears are defending the $600 to $638.57 overhead resistance zone. A range-bound action after a strong uptrend shows that traders are not hurrying to book profits.
BNB/USDT daily chart. Source:TradingView
Both moving averages are sloping up and the RSI above 56 suggests that the bulls have the upper hand. If the buyers can push the price above $530, the BNB/USDT pair could start its journey to the resistance of the range at $600. The bears are again likely to mount a stiff resistance between $600 and $638.57.
If the price turns down from this zone, the range-bound action may continue for a few more days. On the contrary, if the bulls push the price above $638.57, the pair could start its journey to $720 and then $832.
This positive view will invalidate if the bears sink and sustain the price below $480. If that happens, the selling may intensify and the pair may drop to the 50-day SMA ($368).
BNB/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows the price is stuck inside a large symmetrical triangle. Although the price rebounded off the support line of the triangle, the bears are attempting to stall the relief rally at the moving averages.
If that happens and the price turns down from the current level, the bears will sense an opportunity and try to sink the price below the triangle. If they succeed, the pair could start a deeper correction to $348.
Alternatively, if the bulls push the price above the moving averages, the pair could rise to the resistance line of the triangle. A breakout of the triangle may signal the resumption of the uptrend.
XMR/USDT
Monero (XMR) is in a strong uptrend and repeated attempts by the bears to start a correction have failed as the bulls have aggressively bought the dips close to the $288.60 support.
XMR/USDT daily chart. Source:TradingView
The bulls have successfully defended the 20-day EMA ($335) and both moving averages are sloping up, suggesting the buyers have the upper hand. However, the RSI is showing the first signs of a negative divergence, indicating the momentum may be weakening.
If the price turns down from the current level and breaks below the 20-day EMA, it will suggest the possible start of a correction to $288.60. On the other hand, if the bulls push the price above $424.55, the XMR/USDT pair could rally to $498.
XMR/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows that the volatility has picked up in the past few days. The bears have repeatedly broken the 50-SMA but the bulls have aggressively purchased the dip and pushed the price back above the 20-EMA.
If the pair rebounds off the current level and rises above $405.40, a retest of $424.55 is possible. A breakout of this resistance could start the next leg of the uptrend. Conversely, if the bears sink the price below the moving averages, a drop to $288.60 is likely.
CAKE/USDT
PancakeSwap (CAKE) had been facing stiff resistance near the $28 level for the past few days. The bears tried to sink the price below the 20-day EMA ($24) on April 23 but the bulls aggressively purchased the dip, suggesting the sentiment remains positive.
CAKE/USDT daily chart. Source:TradingView
Momentum picked up in the past two days and the CAKE/USDT pair has broken out to a new all-time high today. The upsloping moving averages and the RSI near the overbought zone suggest the path of least resistance is to the upside.
If the bulls sustain the price above $30, the pair could rally to $34.50. This bullish view will invalidate if the bears sink and sustain the price below the 20-day EMA. Such a move will be a significant event as the price has not sustained below the 20-day EMA since March 24.
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for CAKE on April 23, just as the rally was getting started.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
VORTECS™ Score (green) vs. CAKE price. Source:Cointelegraph Markets Pro
As seen in the chart above, the VORTECS™ Score for CAKE flipped green on April 23 when the price was $25.24.
From there, the VORTECS™ Score consistently remained in the green and CAKE rallied to a high at $31.12 on April 25, recording a gain of 23% in about two days.
CAKE/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows the formation of an inverse head and shoulders pattern. This bullish setup has a pattern target at $34.70. The 20-EMA has started to turn up and the RSI has risen above 65, indicating the bulls have the upper hand.
In case of a correction, the bulls will try to flip the neckline of the pattern into support. If they do that, the uptrend could resume. Conversely, a break below $27.50 may tilt the advantage in favor of the bears, signaling selling at higher levels
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Bitcoin still moving sideways on the lower timeframes has managed to hold above key support. At the time of writing, BTC trades at $49.807,17 with 16.8% and 2.4% in the weekly and monthly charts, respectively. The market cap stands at 938 billion.
BTC trending down on the daily chart. Source: BTCUSD Tradingview
Trader Byzantine General has pointed to $47,000 as support, according to on-chain data. As seen in the chart below, Bitcoin whales have formed 4 major clusters of support with a large amount of BTC bought at $48,507; $47,646; $46,532, and $45,507.
Source: Whalemap
Conversely, the price zone around $55,000 has become a major resistance and an area with a “ton of whale inflows”, as monitor Whalemap stated. The 200-day Exponential Moving Average (EMA) for Bitcoin in the daily chart will be its most important support. Now, this metrics sits around $40,000, a number BTC could revisit, according to Byzantine General:
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47k was support, a bunch of stuff confirmed this, including whale bubbles. That’s why I said a few hours ago that we probably see a relief bounce. But bigger picture I think it’s quite likely we fizzle down to 40k.
Bitcoin’s dominance has also been affected by its price performance. The metric dropped below 50% for the first time since January 2018 when it reached 37%, as Chief Strategy Officer at CoinShares, Meltem Demiros, claimed. At present, BTC’s dominance displays some recovery and is back above 50%.
BTC Dominance on a 3 month low. Source: BTC.D Index Tradingview
When BTC’s dominance dropped 3 years ago, altcoins saw important gains. On the surface, this market cycle could go on a similar path. However, Demiros believes that profits for some altcoins, like Solana (SOL) and Terra (LUNA), were not driven by “cash inflows” but from a “large rotation” on crypto platforms.
Therefore, it seems necessary for investors to keep track of an altcoin’s trading volume and market depth. Coins with low liquidity, trading volume, and “price narratives” could be susceptible to high volatility. Demiros added:
The story around BTC dominance and the rise of alts is def one to follow. History doesn’t repeat, but it rhymes. I’m curious to see how this cycle will unfold and what will be different. Make sure u look at more than just price when making decisions!
New Investors Drive Bitcoin’s Sell-off
Data from Glassnode for the Entity-Adjusted Dormancy Flow (EADF), metric used to time market lows and bullish or bearish trends points to a high level of activity by new investors during this week sell-off.
As analyst William Clemente said and showed in the chart below, BTC’s dormancy is decreasing. Therefore, “new coins” are being transferred to long-term holders. The Long-Term Holder Net Position Change has also seen a rise over the past days. Clemente said:
Bitcoinvolatility is simply a mechanism for transferring coins from weak-hands to strong-hands with conviction.
The CEO of crypto intelligence firm Messari says that the Biden administration’s proposed tax hike on capital gains could be bullish for crypto and the decentralized finance (DeFi) space.
In a new interview on CNBC, Ryan Selkis says that investors may turn to DeFi amid plans to increase the federal capital gains tax rate to as much as 43.4% from its current rate of 23.8%.
“If you think about this capital gains issue, one of the unintended consequences might be that more capital’s locked in this crypto ecosystem long term and medium term. Ultimately, that’s going to be to the benefit of this entire new class of assets.
They’re referred to as DeFi assets, essentially, being able to borrow against existing crypto holdings rather than sell them and trigger a taxable event. You might have structurally higher interest rates. You might have a better tax setup to invest in those assets and those protocols in that ecosystem versus taking money out of the equation. So I still think that there’s a lot of upside in this market.”
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As for the current Bitcoin correction, Selkis says the dip can bring in a new wave of buyers.
“If you look at the performance, just year-to-date, the total crypto market cap is still up 100%. Bitcoin is still up 65%, so even though we come back at about 25%, that’s just the normal course of volatility. If you look at any other time period outside of the one week, 24-hour, and one month, Bitcoin and crypto at large are still the highest performing asset classes and the highest performing mega assets, so this could be a good buying opportunity.”
Selkis also explains why he thinks that the crypto market has not yet reached the top.
“Believe it or not, even though we’ve had a major run-up this year, we haven’t seen something analogous to the last couple of cycles where the local top and that cyclical top is really marked by a doubling of Bitcoin and Ethereum price in less than a week, which is an insane pace of growth. We haven’t seen anything close to that, so I think if you’re looking for a blow-off top, this probably isn’t it. It’s probably just that usual course of volatility, and we’d actually expect in a typical bull cycle to have six pullbacks of about 30% or more. We’ve had three so far versus six in 2017, for instance.”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
