Cardano price paints ‘death cross’ with ADA at two-month lows vs. Bitcoin

ADA price has been struggling against the U.S. dollar in October.

Cardano (ADA) has formed a deadly "death cross" on its daily chart against Bitcoin (BTC) — a market signal that's generally seen as a warning of more downside in the near term.

The ominously-titled indicator kicks in when an asset's short-term moving average closes below its long-term moving average. In doing so, it calls for technically-minded traders to increase their bearish positions in the market.

 ADA/BTC in trouble

On Tuesday, ADA's 50-day exponential moving average (50-day EMA; the velvet wave) dropped below its 100-day exponential moving average (100-day EMA; the blue wave). That marked the sixth 50–100 EMA bearish crossover ever on the ADA/BTC daily chart, raising fears of further declines ahead.

ADA/BTC daily price chart featuring Oct 2021 death cross. Source: TradingView

That is partly due to ADA's earlier price reactions to death crosses. For instance, in September 2020, the Cardano token's price dropped almost 38.50% against Bitcoin after painting a 50–100 EMA bearish crossover.

Similarly, a death cross pattern on May 12, 2019, subsequently saw a 62.50% price decline.

ADA/BTC daily price chart featuring May 2019 death cross. Source: TradingView

Nonetheless, the likelihood of an immediate selloff remains relatively low. That is mainly because ADA's daily relative strength index (RSI), which alerted the token's status against Bitcoin as oversold, is below 30. Traders typically treat an excessively sold RSI as their cue to enter the market.

For instance, in May 2019, the death cross's formation coincided with the RSI treading below 30. Later, the price bounced by over 30% to retest the 50-day and 100-day EMA waves as resistance, underscoring traders' intention to buy oversold cryptos.

Applying the same fractal to the current price action, one can expect the ADA/BTC rates to bounce back, especially as it drops to its two-month-low at 0.00003372 BTC runs down to retest a five-month-old support area defined by 0.00003192–0.00003075 BTC (the red bar in the first chart above).

That inverse Cup and Handle

A weakening ADA/BTC rate merely reflects Cardano's clumsy performance against the U.S. dollar in recent sessions versus Bitcoin, which has surged massively against the greenback in the same timeframe.

For instance, Bitcoin's month-to-date gains against the dollar sit around 43%. In comparison, Cardano's price has slid by over 6% during the same period. 

But further weakness could be expected, according to an inverse Cup and Handle pattern taking shape on its dollar-quoted charts. 

ADA/USDT daily price chart featuring inverse cup and handle pattern. Source: TradingView

In detail, inverse Cup and Handle patterns appear when the price forms a large crescent shape followed by a modest upward retracement.

Analysts consider them as bearish reversal indicators, for they tend to send the price down by as much as the maximum distance between the Cup's top and its right-hand's bottom level if the price breaks below the pattern's support.

Related: Buy the rumor... buy the news? BTC price passes $63K as US Bitcoin ETF launches

ADA's recent price action fits the inverse Cup and Handle description, with the price now looking to break below the structure's resistance line near $1.97. As a result, the downside target price is the $0.772–$0.820 area if Cardano confirms a bearish breakout.

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.

All-time highs next? Bitcoin holds $62K as the dollar index tumbles to 3-week lows

The U.S. dollar index reached its lowest levels in three weeks on Oct. 19, triggering a rising wedge pattern.

The U.S. dollar index (DXY) could continue its slide in Q4, according to a classic technical setup known as a “rising wedge.” The greenback’s bearish prospects may boost Bitcoin’s (BTC) price to new all-time highs as it holds above $62,000.

DXY poised for another 1.75% drop

Rising wedges are bearish reversal patterns that begin wide at the bottom but contract as the price increases. As a result, the trading range narrows, which makes the rally unconvincing. That typically prompts the price to break below the wedge’s support line and later fall by as much as the maximum distance between the pattern’s trendlines.

The DXY has been forming a similar price structure since August. Moreover, the index’s decline this week had it break below the wedge’s support line, therefore triggering a bearish setup toward 92.416, down about 1.75% below the level of breakout (around 93.98).

DXY daily price chart featuring rising wedge setup. Source: TradingView

A week ago, DXY reached a one-year high of 94.563, reaping the benefits of stagflation fears and the Federal Reserve’s decision to unwind its $120-billion-a-month asset purchase program in November, followed by interest rate increases next year.

But the index dropped to a three-week low on Oct. 19, underscoring that money markets have priced in the Fed’s tapering decision. Instead, their focus has shifted toward policy normalization elsewhere, including the United Kingdom, where analysts have forecasted rate hikes worth 35 basis points by the end of this year.

Bitcoin rallies on ETF FOMO

Bitcoin price found support from the weaker dollar this week, in addition to optimism about the debut of the first exchange-traded fund (ETF) tied to BTC futures on the New York Stock Exchange.

BTC/USD has rallied by over 40% month-to-date to hit a five-month high of $62,987 on Oct. 19. A minor correction ensued, but Bitcoin held $62,000 as its interim support against a weakening dollar sentiment. 

BTC/USD daily price chart featuring ascending channel pattern. Source: TradingView

Technically, Bitcoin reached the bullish exhaustion level of its prevailing ascending channel range. With its relative strength index (RSI) also overbought with a reading above 70 on the daily timeframe, the cryptocurrency could undergo an interim price correction with a short-term support target near $60,000.

But long term, multiple analysts anticipate Bitcoin’s price to hit $100,000.

Tom Lee, co-founder of Fundstrat Global Advisors, said in a note on Oct. 18 that ETFs based on Bitcoin futures would together attract more than $50 billion in inflows in the first year, adding that BTC could conceivably rise to $168,000 in response.

Related: BTC price is up 50% since China ‘selflessly’ banned Bitcoin mining

Jurrien Timmer, director of global macro at Fidelity Investments, noted that Bitcoin would become a six-figure asset by 2023, citing Metcalfe’s law, which measures a network’s value based on its growth rate.

“Other technology innovations, and even, like, a stock like Apple — not that I’m a security analyst — has gone through that same process, where its sales go up 38-fold over 10, 20 years, and its market value goes up by 900-fold,” Timmer told Yahoo Finance, adding:

“So it’s an exponential increase. And based on those metrics, by 2023, my models show $100,000.”

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, and you should conduct your own research when making a decision.

This Ethereum price chart pattern suggests ETH can reach $6.5K in Q4

The upside outlook appears as ETH price eyes a breakout above its five-month-old resistance trendline.

Ethereum's native token Ether (ETH) has rallied by more than 415% this year to over $3,800, and two major bullish patterns developing on its charts highlight the scope for another upside move, ultimately toward the $6,200-$6,500 price range.

ETH price eyes $4K resistance breakout

The first decisive break above the psychological $4,000-mark, which serves as a resistance trendline to five-month-olds ascending triangle and a cup and handle pattern, could trigger a textbook price rally in the coming sessions. 

In detail, the $6,250-level appears as the profit target for the Ascending Triangle pattern, calculated by measuring the widest distance between its horizontal and rising trendlines and adding the output to the potential breakout level around $4,000.

ETH/USD daily price chart featuring Ascending Triangle (black) and Cup & Handle (blue) pattern. Source: TradingView 

Thus, the price boom reflects moves equivalent by roughly 64%.

At the same time, the Cup and Handle pattern, which has a slightly lesser success rate than Ascending Triangle, shows a potential run-up toward $6,550 in the coming sessions, up by 56% from current levels.

Its profit target emerges by measuring the distance between the Cup's right peak and its bottom and adding the outcome to the potential breakout level around $4,000—the same as Ascending Triangle.

One of the primary catalysts that support the two bullish indicators is trading volume, which has been falling across the formation of the said patterns. That suggests a weak consolidation sentiment among traders. Meanwhile, the relative strength index (RSI) below the overbought threshold of 70 also shows adequate room for a bull run.

The Bitcoin correlation effect

The optimistic outlook for ETH appears in the wake of a market-wide upside boom led by Bitcoin's (BTC) 29% month-to-date price rally.

According to CryptoWatch, the 30-day correlation coefficient between Bitcoin and Ethereum sits near 0.89, meaning that the success rate of the two assets moving in sync is 89%.

Ecoinometrics, a crypto-focused newsletter service, noted the positive correlation as it highlighted the Ether price's reaction to Bitcoin "halvings," a pre-programmed event that slashes the BTC's issuance rate by half every four years, against its 21 million supply cap.

The portal studied Bitcoin and Ether's price reactions to the previous two halvings and applied the dataset to predict their tops after the third halving, which took place on May 11, 2020. As a result, it anticipated BTC to rise 29.5x times to hit $253,800 by late November 2021.

Bitcoin vs. Ethereum — Post BTC halving growth trajectory. Source: Ecoinometrics

Similarly, Ecoinometrics highlighted $22,300 as Ether's price target in the same period, based on its 120x price rally following the second Bitcoin halving.

ETH supply crunch continues

More bullish cues for Ethereum appeared in the form of its ongoing supply squeeze.

Related: Ethereum price hits $3,800, boosting bulls' control in Friday's ETH options expiry

Notably, the total number of Ether deposited into the Ethereum 2.0 smart contract reached an all-time high of around 7.98 million ETH on Monday. These tokens remain locked/untransferable for one year or more.

Ethereum total value in ETH 2.0 deposit contract. Source: Glassnode

Meanwhile, the total amount of Ether held across all exchanges continued to stay around its record low levels, with CryptoQuant reporting 18.187 million ETH in reserves on Monday compared to 23.323 million ETH an year ago.

Ethereum reserves across all exchanges. Source: CryptoQuant

Moreover, crypto data tracker Santiment reported a rise in new Ether addresses last week while the number of non-zero Ether wallets reached a record high of 64.5 million.

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.

Shiba Inu eyes ‘much wow’ 90% breakout as SHIB price paints a textbook bull pattern

The price of the Dogecoin-inspired meme cryptocurrency has been consolidating inside a structure that appears like a Bull Pennant.

The Shiba Inu (SHIB) market is in a very strong bull market in 2021, and one major continuation pattern on its longer timeframe charts highlights the scope for an additional 90% upside move ahead.

In detail, SHIB rose over 1,250% year-to-date (YTD) to establish the yearly high at $0.00003528 (data from Binance) on Oct. 8. Later, the cryptocurrency cracked under the profit-taking sentiment, leading to a 41.50% price correction to $0.00002060.

But bulls started accumulating SHIB near the said low level. A rebound ensued and the price rallied over 55% to $0.00003200, where it met another round of selloffs. Overall, the SHIB price kept forming lower highs and higher lows in the next sessions, forming a Triangle structure that appeared like a Bull Pennant.

Analysts treat Pennants as bullish continuation patterns, i.e., their formation, coupled with declining trade volumes, tends to send prices in the direction of their previous trend — by as much as the height of the previous price rally, also known as Flagpole.

So it appears, SHIB has been forming the same structure.

SHIB/USDT 12-hour price chart featuring Bull Pennant setup. Source: TradingView

The SHIB Flagpole's height comes to be around $0.00002450. Therefore, considering the cryptocurrency would pursue a breakout to the upside from the Bull Pennant's apex (the level at which its upper and lower trendlines converge), its next target would be at around $0.00005200, roughly 90% higher.

Yet, Pennants are notorious for being the worst reliable technical indicators, at least according to a study conducted by Samurai Trading Academy's Cody Hind in 2020, based on his assessment of 10 years of market data and over 200,000 trading structures. 

He found that Bull Pennants successfully reached their price targets in 54.87% of cases.

Macro fundamentals

The SHIB price almost doubled in October in parts due to Tesla CEO Elon Musk's cryptic endorsement of the Shiba Inu project and amid reports of whale buying activity and the rise of its decentralized exchange ShibaSwap.

Soecifically, Musk posted the picture of his Shiba Inu puppy on Oct. 4. The billionaire entrepreneur's tweet coincided with the SHIB price rallying by more than 330% in the next four days, reminiscent of how he influenced the prices of Dogecoin (DOGE) earlier this year.  

The jump also took cues from reports of whale buying activity in the Shiba Inu market. For the uninitiated, Yahoo Finance highlighted in his Oct. 5 report that an unknown entity purchased 6.2 trillion SHIB for circa $44 million in late September.

Related: Shiba Inu rebounds 40% despite major selling by SHIB whales

Meanwhile, Shiba Inu's namesake decentralized exchange ShibaSwap detected a surge in the amount held by its liquidity pools. As of Monday, the total value locked inside the ShibaSwap contracts was $411.42 million versus $253.41 million at the beginning of this month, as per data provided by DeFi Llama.

ShibaSwap TVL as of Oct 18, 2021. Source: Defi Llama

At its prime, in July 2021, ShibaSwap was managing $1.76 billion worth of funds via its liquidity pool.

Ishan Arora, a hedge fund manager associated with Tykhe Block Ventures, told Yahoo Finance that Shiba Inu emerged as a product of an ongoing craze for meme cryptocurrencies, adding that most people buy these tokens by merely following some influencers' advice.

Arora warned investors about the risks of putting money into such one-hit wonders, but mentioned Dogecoin for its ability to return incredible profits earlier this year.

"Early Doge investors last year did quite well, so it is not as black and white as most want it to be.”

Meanwhile, crypto data tracking service Santiment detected an increase in Shiba Inu whale transactions over $100,000 in the past 24 hours, noting that their occurrence is typically bullish for SHIB.

Shiba Inu whale transactions exceeding $100K. Source: Santiment

"When these transactions come in bunches, price rises generally follow," the platform wrote in a tweet published Monday.

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.

Next Bitcoin price crash will be ‘shallower’ than 80%, says Pantera Capital CEO

Bitcoin price increases will also be less dramatic moving forward, the report suggests.

Bitcoin (BTC) market's tendency to crash by over 80% after logging strong bull runs might come to an end.

That is according to a new report published by California-based hedge fund Pantera Capital. In detail, the report notes that the recent periods of BTC price drops have been less severe than in the past.

For instance, in 2013-15 and 2017-18, Bitcoin crashed by as much as 83% after topping out near $1,111 and $20,089, respectively. Similarly, the cryptocurrency's bull run in 2019-20 and 2020-2021 led to massive price corrections. Nevertheless, the scales of their retracements afterward were -61% and -54%, respectively.

Bitcoin bull and bear markets across the history. Source: Pantera Capital

Dan Morehead, the chief executive at Pantera Capital, highlighted the consistent drop in selling sentiment after the 2013-15 and 2017-18 bearish cycles, noting that future bear markets would be "shallower." He explained:

"I long advocated that as the market becomes broader, more valuable, and more institutional the amplitude of prices swings will moderate."

The statements appeared as Bitcoin renewed its bullish strength to retest its current record high near $65,000.

BTC/USD rallied above $60,000 for the first time since early May as the U.S. Securities and Exchange Commission approved the first Bitcoin exchange-traded fund (ETF) after years of rejecting similar investment products.

The approval of ProShare's Bitcoin Strategy ETF raised expectations that it would make it easier for institutional investors to gain exposure in the BTC market. That also helped Bitcoin wipe almost all the losses incurred during the April-July bear cycle as the BTC price doubled to reclaim levels above $60,000.

Bitcoin price cycles throughout the history. Source: Pantera Capital

BTC undervalued?

It's becoming increasingly common to hear $100,000 valuations as Bitcoin grows to become a mainstream financial asset following its first ETF approval.

Related: $200K BTC price ‘programmed’ as Bitcoin heads toward 2nd RSI peak

Morehead cited the popular stock-to-flow model—which studies the impact of Bitcoin's "halving" events on prices—to rule out a similar bullish outlook for the cryptocurrency. He noted that the first halving reduced the new Bitcoin issuance rate by 15% of the total outstanding supply (around 10.5 million BTC), leading to a 9,212% BTC price rally.

Reduction in Bitcoin supply after each halving. Source: Pantera Capital

Similarly, the second halving decreased the supply of new Bitcoin by one-third of the total outstanding Bitcoins (~15.75 million BTC). It led to a 2,910% bull run, almost a third of the previous one, thus showing a bit less impact on the Bitcoin price.

Post-Bitcoin halving rallies. Source: Pantera Capital

The last halving on record was on May 11, 2020, which further reduced the amount of new BTC against the circulating supply with Bitcoin rallying by over 720% since.

"The flipside of is we probably won't see any more of the 100x-in-a-year rallies either," said Morehead, adding:

The cycles shown logarithmically make today’s level look cheap to me.

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.

Better call SOL: Month-long consolidation puts Solana price en route to $275

SOL has been forming a Bull Pennant following its 14,200% year-to-date price rally.

Solana (SOL) price technicals suggest SOL can hit $275 in the coming sessions.

The upside outlook for the world's sixth-largest cryptocurrency by market capitalization comes as it consolidates inside a range that appears like a Bull Pennant.

In detail, Bull Pennants are bullish continuation indicators that form as the price consolidates inside a Symmetrical Triangle-like structure following a strong move upside.

The consolidation trend accompanies declining volumes, reflecting on the trend's underlying weakness.

And, as the price approached the apex—the point where the Pennant's trendlines converge, it tends to undergo a breakout to the upside, with the bull target at length equal to the height of the previous uptrend, i.e., Flagpole.

SOL/USDT daily price chart featuring bull pennant setup. Source: TradingView

Solana's flagpole height is roughly $125. That said, a breakout move at the Pennant's apex (at around $150) puts SOL en route to $275.

SOL/BTC pair also gains despite Bitcoin at $60K 

Solana's prospects of hitting $275 come amid an overall price boom across the crypto market.

However, SOL price also rallied by 8% against Bitcoin (BTC) in the past two days in part due to its listing o South Korea's top crypto exchange Upbit.

Related: Solana chart 'bull flag' eyes $250 despite SOL price down 40% since last week

Overall, SOL has been one of the best performing altcoins in 2021, with its year-to-date profits at 8,500%. SOL traded at a record high of $216 in early September.

Institutional inflows boost SOL price

Despite Bitcoin currently in the limelight, Solana's price likely also received a boost from institutional capital via dedicated investment funds, according to a report from CoinShares published earlier this week.

"Digital asset investment products saw inflows 500 totaling US$226 million, bringing the 8 week run of inflows to US$638 million," CoinShares noted, adding:

"It was a mixed picture in other altcoins with recent favorites Solana (US$12.5 million) and Cardano (US$3 million) continuing to see inflows, suggesting the focus hasn’t entirely switched to Bitcoin.
Institutional inflows into crypto funds by asset. Source: CoinShares, Bloomberg

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.

Polygon can hit $3.50 in Q4 as MATIC’s 20% weekly rally triggers bull flag setup

MATIC retested the bull flag’s upper trendline as resistance Friday after its price rose by up to 30%.

Polygon (MATIC) has the potential to reach $3.50 by the end of this year as it charts a pattern that’s starting to resemble a bull flag.

In detail, bull flags are bullish continuation patterns that emerge when the price consolidates following a strong move higher. In doing so, the price tends to trend lower while leaving behind a sequence of higher lows and lower lows.

A breakout occurs when the price closes above the flag’s upper trendline (or resistance). In other words, the price can rise by as much as the height of the previous uptrend, also known as a flagpole.

It appears MATIC has been painting a similar pattern even since it established a record high of $2.89 on May 17, following a $2-long upside run (the flagpole).

MATIC/USD weekly price chart featuring bull flag setup. Source: TradingView

As a result, should MATIC’s price break above the flag’s resistance decisively, it will shift its upside target to about $2 above the breakout level. That would roughly put the Polygon token en route to $3.50.

The pullback angle

The bullish setup appeared as MATIC surged by around 30% on Friday to reach a one-month high near $1.65.

Nonetheless, the cryptocurrency experienced a slight correction near the said peak level, dropping by around 4% on profit-taking sentiment among daytraders. Moreover, since the correction occurred right around the bull flag resistance, it raised the possibility of extended selloffs ahead.

Should a pullback happen, it will risk dropping MATIC to its first line of weekly support toward its 20-week exponential moving average (20-week EMA; the green wave) around $1.231. Meanwhile, further weakness could shift the downside target to the 50-week EMA (the velvet wave) around $0.868.

Bulls have the upper hand

In addition to the full flag, MATIC painted a cup-and-handle pattern that presented the possibility of the cryptocurrency hitting $1.80 soon.

Twitterati MK2 Trading spotted the bullish reversal indicator first on the Polygon token’s daily price chart. It showed the price forming a rounding bottom (cup) following an upside move and then painting a descending channel range (handle).

MATIC/USD daily price chart featuring cup and handle pattern. Source: TradingView

A subsequent breakout from the handle’s trading range would signal a bullish continuation. In doing so, the price would eye a run-up toward the level at a length equal to the cup’s depth. As a result, MK2 Trading expects MATIC at $1.80 in the coming sessions.

Macro fundamentals

The latest bout of buying in the Polygon market appeared after Upbit, one of the leading South Korean crypto exchanges by volume, added MATIC pairs to its trading platform. Additionally, the exchange also listed Solana (SOL) and NuCypher (NU) pairs.

Solana was another standout performer on Friday, with its native token, SOL, surging by over 11.5%, while NuCypher’s NU rallied by more than 845% Friday after Upbit’s announcement.

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.

CME Bitcoin futures open interest hits 8-month high, greater than when BTC price was at $65K

Open Interest surged to $3.22 billion Thursday to levels not seen since February.

Open interest (OI) for Bitcoin (BTC) Futures trading on the Chicago Mercantile Exchange (CME) inched toward a new record high Thursday as BTC reclaimed its five-month high of $58,550 on BitStamp.

The total number of outstanding derivatives contracts on CME Group's Bitcoin Futures market reached $3.22 billion, according to data provided by ByBt.com, just $40 million below its record high logged in Feb 2021. Nonetheless, the OI came out to be higher than it was at the Bitcoin price's peak in mid-April.

In detail, the Bitcoin Futures OI on CME was $3.02 billion on April 14, the day on which the BTC price—nearly reached $65,000. But on Thursday, the OI was more than 6% higher than the readings from mid-April, even as the BTC price wobbled inside the $57,000-$58,550 price range.

CME Bitcoin Futures open interest. Source: ByBt.com

Traders often use OI as an indicator to confirm trends in both derivatives and spot markets. For example, a rising number of outstanding derivatives contracts gets interpreted as new money coming into the market, irrespective of the bias.

Meanwhile, in the case of Bitcoin, a rising open interest in the futures market appears indicative of accredited investors' wanting to increase exposure to BTC.

Commercial sector increases Bitcoin Futures exposure

The latest OI readings suggest that more institutional capital is entering the Bitcoin market. As a result, investors have been looking more confident in opening new positions in the $50,000-$58,000 price range, with the CME volumes trending higher in the past seven days.

Bitcoin futures — volume and open interest. Source: CME

Analysts see a uniform rise across OI, volume, and price as signs of new buying in the futures market. That also puts the underlying asset in a better position to continue its uptrend. So it seems, Bitcoin is undergoing a similar upside trend.

Prime evidence for a bullish Bitcoin comes from the Commodity Futures Trading Commission's record released on Oct. 5. It notes that the commercial sector — which comprises corporate hedgers — have accelerated their Bitcoin Futures purchases; they now hold a net position of more than 10,000 BTC.

CME BTC Futures exposure changes. Source: CFTC, Forbes

At the same time, however, hedge funds and retail investors have emerged to be net short in the Bitcoin Futures market. Nevertheless, that could be their tactic to offset long positions elsewhere, such as in the spot market.

That is primarily due to a higher annualized premium available on CME Bitcoin Futures prices over spot markets. In recent days, CME Bitcoin futures price has been regularly trading 15% above BTC spot price, compared with around 7.7% on average in the first nine months of 2021.

Bitcoin Futures premium against spot prices. Source: Skew 

Macro fundamentals behind Bitcoin resurgence

The latest bout of buying in the Bitcoin spot market also appeared in the wake of statements coming from U.S. regulators.

For instance, Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), and Jerome Powell, the chairman of the Federal Reserve, discouraged a ban on Bitcoin. Meanwhile, the increasing prospect of a Bitcoin ETF approval by the SEC has also fueled the "buy the rumor" narrative.

Related: Bitcoin analyst ‘highly doubts’ return to $50K — Will the weekly close spark a correction?

Investors also sought exposure in the Bitcoin market as consumer prices continued to soar in the U.S. According to the Labor Department, the Consumer Price Index (CPI) rose to 5.4% year-over-year in September for the first time in thirteen years.

JP Morgan Chase noted in its recent report that higher inflation prompted institutional investors to seek exposure in Bitcoin, with some even seeing the cryptocurrency as a better haven asset than gold. In another report published in Jan 2021, the U.S. banking giant had anticipated the BTC price to reach $140,000 in the long term.

"A crowding out of gold as an ‘alternative’ currency implies big upside for Bitcoin over the long term," it had noted.

"A convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is in our mind a multiyear process. This implies that the above-$146,000 theoretical Bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.”

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.

Polkadot eyes breakout to $75 after DOT price rally sets up classic bullish reversal

The inverted head and shoulders pattern hints at a decisive breakout move in the Polkadot market.

Polkadot (DOT) chart technicals suggest it may rally to a new record high near $75 if DOT can manage to close above its $41–$43 range decisively.

That’s according to a classic bullish reversal setup known as an inverse head and shoulders (H&S) that forms when the price undergoes three selloffs during a period of market consolidation.

Specifically, the pattern contains an initial selloff, followed by a short-term price rally and another — deeper — selloff. That leads to one more small correction to the upside, followed by another selloff that bottoms out near/at the lowest level of the first selloff.

Inverse head and shoulders pattern illustration. Source: ThinkMarkets

The first and last selloffs represent “left” and “right” shoulders, respectively, while the second selloff represents the “head.” On the other hand, the level around which all the short-lived rallies top out represents the “neckline” of the head and shoulders pattern.

Traditional analysts typically calculate the H&S upside target from the neckline resistance by measuring the maximum distance between it and the head formation.

So, it appears that Polkadot has been forming a similar bullish pattern on its weekly chart, as shown below.

DOT/USD weekly price chart featuring inverse head and shoulders setup. Source: TradingView

The maximum distance between DOT’s neckline and the head’s bottom comes out to be nearly $31. Therefore, a successful bullish breakout above the neckline range of $41–$43 puts the next long-term target at approximately $75.

Parachain auctions coming in November

The inverse H&S pattern emerged as DOT rallied by almost 30% this past week to reach a five-month high at around $44. At the core of its weekly uptrend was a price boom across the crypto market, as well as the news of Polkadot’s first parachain auctions going live on Nov. 11.

In detail, Polkadot’s parachains are parallelized, application-specific chains — child ledgers tethered to a single parent ledger called the Relay Chain. Due to their parallel nature, parachains tend to process multiple transactions simultaneously and maintain and record their data on the main ledger by communicating with other chains.

Related: Polkadot to debut parachain auctions after governance vote

That comes as a break from the method of queuing transactions and processing them sequentially.

DOT, which serves as a utility token for fees, governance, interoperability and bonding inside the Polkadot ecosystem, rallied by more than 24% after the parachain auction announcement.

Next, Polkadot aims to introduce a cross-chain feature that will enable its Relay Chain to external blockchains (Bitcoin, Ethereum, etc.) via specialized smart contracts. Meanwhile, the project also plans to launch “in-built bridging modules” that will enhance the interoperability of external blockchains with Polkadot. 

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.

Elon Musk’s Tesla is already $1 billion in profit from holding Bitcoin

Tesla's Bitcoin stash is now worth $1 billion more than when Elon Musk approved the purchase in February.

Tesla's (TSLA) bold foray into the Bitcoin (BTC) market has been paying off in 2021 as BTC price rallies in October to hit over $58,000 on Oct.14.

Tesla currently holds roughly 43,200 BTC, worth roughly $2.5 billion at today's prices, according to online monitoring resource Bitcointreasuries.net. This is approximately 65% or $1 billion more than what the carmaker paid in February when Elon Musk's company revealed that it added $1.5 billion in BTC to its balance sheet.

BTC/USD daily price chart. Source: TradingView.com

In Q2, Tesla's sold 10% of its Bitcoin holdings — about 46,000 BTC — at a reported average price of around $50,000 per token. In its Q2 earnings report, the company had notified that it booked gains worth $128 million from its Bitcoin sale.

Tesla made first billion in profit in Q2 from selling cars 

Following the latest Bitcoin price rebound, Tesla's net profits from its crypto holdings came out to be as much as its income from Q2.

In detail, Tesla had reported $1.14 billion in net profit for Q2, the first time it ever crossed the one billion dollars mark. The income was a part of $11.96 billion in revenue that Tesla made mostly by selling cars — about $10.21 billion. The remaining $354 million came from the sales of regulatory credits.

Tesla revealed on Oct. 1 that it had delivered 241,300 electric vehicles during Q3, compared to 201,250 vehicles in the previous quarter. Combined with Tesla's Bitcoin profits, expectations are high for blockbuster earnings set to be released after the market closes on Oct 19.

"We think Q3 will be TSLA's strongest quarter ever," said Piper Sandler analyst Alexander Potter.

Will other companies follow?

Thus far, Tesla's Bitcoin strategy has been very successful, providing a case study of how other corporates could replace a portion of their cash reserves with BTC.

That said, several companies that invested in Bitcoin before Tesla, have seen even greater gains.

For instance, business intelligence firm MicroStrategy purchased around $3.15 billion worth of Bitcoin in multiple buying rounds. With its first purchase dating backing to Aug. 11, 2020, the company's net Bitcoin profits are now near $6.3 billion, almost doubling its investment.

Jack Dorsey's payment service firm Square also seen considerable gains from holding Bitcoin, now worth over $442 million from its $220 million investment.

Additionally, Canada-based crypto mining firm, Hut 8 Mining Corp, has seen its $39.3 million Bitcoin purchase increase in value by more than 600%, reaching around $250 million. Back in June, the company also revealed plans to hold 5,000 BTC by 2022. 

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.

Binance Coin eyes $560 next after BNB price ‘Cup and Handle’ breakout

BNB price gets a boost as Binance launches a $1 billion blockchain fund.

The ongoing price boom in the Binance Coin (BNB) market is painting a classic bullish chart pattern with an upside target of $560.

Dubbed as Cup and Handle, the pattern appears when the price forms an advance that appears like a U-shaped trend (Cup). That follows up with a formation of a descending channel range (Handle). A breakout above the Handle range typically leads to an upside continuation, with a bullish target at length equal to the Cup's size.

So it appears, BNB has undergone a price trajectory that looks like the Cup and Handle pattern. Furthermore, the cryptocurrency's latest rally, accompanied by an increase in trading volumes, took its prices above the Handle range—a breakout—that raised the possibilities of bullish continuation ahead.

BNB/USD 4H price chart featuring Cup and Handle setup. Source: TradingView.com

As a result, should the BNB price rally sustain, it will eye a run-up towards the Cup and Handle breakout target near $560. Conversely, if the price falls below the Cup resistance (~$437), it would risk invalidating the entire bullish setup.

BNB price fundamentals

The latest BNB price rally appeared after Binance, via its blockchain project Binance Smart Chain (BSC), launched a $1 billion fund to accelerate adoption across the entire crypto industry. This earmarks $300 million for projects building decentralized applications atop BSC.

Traders typically view incubation events backed by blockchain projects as bullish for their native assets. Such events prompt developers to build new projects on dedicated public/private ledgers, which boosts the demand for their in-house tokens.

For example, in early October, Solana, a public base-layer blockchain protocol, announced over $5 million worth of rewards and seed funding for developers participating in its global hackathon called Ignition. The news helped to push the price of SOL, Solana's native token, up by 35%, as Cointelegraph covered.

BNB appeared to have gone through a similar bout of speculation.

Santiment, a crypto data tracking service, also detected a rise in BNB accumulation across wallets that already holds millions of dollars worth of tokens. So-called Binance Coin whales bought about 412,000 BNB in the past two weeks, thus adding 8.7% more tokens to their existing holdings.

Binance Coin whale holders data. Source: Santiment

The BNB accumulation among rich investors surged despite warning signs from regulators in some countries. 

Related: Globe-trotting Binance looks to Ireland for ‘centralized’ headquarters

Binance also remains under investigation by several agencies in the U.S. that have prompted several hedge funds, including Tyr Capital and ARK36, to either stop or scale down trading on its crypto exchange.

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.

Ethereum loses key support level as ETH price falls to two-month lows against Bitcoin

ETH/BTC dropped below its 200-day exponential moving average for the first time since March 2020, raising risks of more downside.

Ethereum's native token Ether (ETH) rallied by more than 15% in the first twelve days of October. But, compared to Bitcoin's (BTC) 30% gains in the same period, the second-largest cryptocurrency is currently in a downtrend when priced in BTC.

So far into October (and the fourth quarter of 2021), the ETH/BTC exchange rate has plunged by over 12%, reaching 0.060215 BTC for the first time in more than two months on Tuesday.

ETH/BTC daily price chart. Source: TradingView.com

The drop also pushed ETH/BTC below one of its longest-standing support zones, the 200-day exponential moving average (200-day EMA; the orange wave), as shown in the chart above. This raises the risk of more downside with 0.055304 BTC serving as the next possible target.

Bitcoin dominance rises on ETF hopes

More evidence for ETH/BTC's weakness came from rising Bitcoin's dominance in the crypto market.

In detail, the Bitcoin Dominance Index (BTC.D), which measures the flagship cryptocurrency's capitalization against the rest of the crypto market, surged from 42.39% on Oct. 1 to 46.64% on Oct. 12. On the other hand, Ethereum's dominance (ETH.D) dropped from 18.15% to 17.57% in the same period.

Bitcoin dominance index daily chart. Source: TradingView.com

That shows that more capital flew/rotated into the Bitcoin market than altcoins so far into October.

Related: Institutional crypto products eye record AUM as investors pile into Bitcoin

The rising Bitcoin dominance coincided with expectations that the United States Securities and Exchange Commission (SEC) would approve four Bitcoin-based exchange-traded funds (ETF) in a matter of weeks. The applicants are Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust, and Kryptoin Bitcoin ETF.

SEC chair Gary Gensler hinted at an optimistic outcome for Bitcoin ETFs despite the securities regulator's history of rejecting similar applications for eight years in a row. Gensler noted that this time, however, the Bitcoin ETF applicants filed under the Investment Company Act of 1940, which offers higher investor protection.

Earlier this week, two "light" Bitcoin ETFs started trading in the U.S., named Invesco Alerian Galaxy Crypto Economy ETF under the ticker SATO and Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC). However, the funds invest 80% of their assets in crypto-related companies, not Bitcoin itself.

SATO ETF 15-minute price chart. Source: TradingView.com

The SEC also approved a third crypto equity ETF. Dubbed the Volt Crypto Industry Revolution and Tech ETF (BTCR), the fund will gain exposure "in entities that hold a majority of their net assets in bitcoin or derive a majority of their earnings from bitcoin mining, lending or transacting."

Bitcoin to go "insane"?

James Seyffart, an ETF analyst with Bloomberg Intelligence, said the news would be "very bullish" for Bitcoin. Similarly, independent market analyst Lark Davis also predicted "insane" market reactions should the SEC approve a Bitcoin ETF having exposure to actual BTC.

So it appears, the speculation over Bitcoin ETF approvals raised traders' appetite for the top cryptocurrency in recent days with BTC outperforming its top rivals, including Ether.

Nonetheless, Ethereum boasts a strong decentralized application ecosystem and remains the key force behind the booming decentralized finance (DeFi) and nonfungible token (NFT) sectors.

David Gokhshtein, the founder of Gokhshtein Media and PAC Global, noted that Ethereum's healthy network effect could send Ether to $10,000 by the end of this year. Meanwhile, as Cointelegraph covered, an ongoing supply crunch in the Ethereum market should remain a major talking point for the bulls moving forward. 

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.

Bitcoin’s $100K price target returns as BTC price breaks out of bull pennant

The bullish analogy appears as Bitcoin reserves across all the crypto exchanges fall to their lowest in the previous 12 months, suggesting holding sentiment among traders.

Bitcoin (BTC) looks poised to pursue a run-up towards $100,000 as its price breaks out of a classic bullish structure.

Dubbed as Bull Pennant, the setup represents a price consolidation period with converging trendlines that form after a strong move higher. It ultimately prompts the price to break out in the direction of its previous trend to a level typically at length higher by as much as the size of the initial large move.

On Bitcoin weekly charts, the cryptocurrency appeared to have been trending inside a similar consolidation structure, with its price fluctuating inside a Triangle-like structure following a strong move higher (Flagpole).

BTC/USD weekly price chart featuring Bull Pennant setup. Source: TradingView.com

Last week, Bitcoin broke above the structure's upper trendline as it rose by 13.5% with rising trading volumes to boot. As a result, the cryptocurrency's breakout move indicated its potential to rise by as much as the size of its previous trend (nearly $50,000).

Measuring from the point of breakout (~$48,200), the Bull Pennant's upside target thereby comes out to be another $50,000 higher, i.e., almost $100,000.

Other predictions

The technical setup projected Bitcoin at $100,000 no longer after many analysts envisioned the cryptocurrency at the same, six-digital valuation.

A team of researchers at Standard Chartered, headed by its global head of emerging market currency research, Geoffrey Kendrick, predicted BTC to hit $100,000 by early next year. They cited Bitcoin's potential to become "the dominant peer-to-peer payment method for the global unbanked" behind their bullish prediction.

David Gokhshtein, the founder of Gokhshtein Media and PAC Global, also imagined Bitcoin above $100,000 before the end of 2021. The executive based his bullish outlook on the amount of available fiat liquidity in the market, which, according to him, has prompted leading Wall Street players to purchase Bitcoin.

"Not everybody's going to come out publicly and tell you that they're buying bitcoin, but they are," Gokhshtein told Business Insider.

"There's too much money in the market. Way too much money. Institutions did not come in here to play for five minutes."

His statements appeared after George Soros' investment firm revealed at a Bloomberg event that it owns Bitcoin, sending the cryptocurrency spiking. That soon followed up with JPMorgan & Chase's latest report that showed institutional investors' preference for Bitcoin over Gold as an inflation hedge.

In an earlier study published in May, the banking giant projected Bitcoin to reach $140,000 in the long term.

Holding sentiment on rise

On-chain indicators highlighted a rise in holding sentiment among Bitcoin traders.

Related: Tesla may have made more money holding Bitcoin than selling cars

In detail, the Bitcoin reserves held across all crypto exchanges recently dropped to their lowest levels in a year, as per data provided by blockchain analytics firm CryptoQuant. The decline illustrated traders' intention to hold their Bitcoin tokens close than trading them for other fiat/digital assets.

BTC reserves across all exchanges. Source: TradingView.com

Therefore, declining Bitcoin balances on exchanges typically follow up with rise in the BTC price.

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.

Shiba Inu rebounds 40% despite major selling by SHIB whales

The sharp upside retracement surfaces as retail frenzy around Shiba Inu hints at testing May peak levels.

Shiba Inu (SHIB) kickstarted its new weekly session in the green as it continued its bullish retracement move from last week’s low of $0.00002058.

SHIB’s price logged an intraday high of $0.00002907 on Oct. 11, netting over 40% returns from its ongoing rebound trend. In doing so, the Dogecoin-inspired meme cryptocurrency eyed an extended runup toward its technical resistance level near $0.00002978, as shown in the chart below.

SHIB/USDT 4H price chart. Source: TradingView

Extended rally ahead?

The Shiba Inu chart also showed traders’ intention to accumulate SHIB tokens when its price tests the 20-4H exponential moving average (20-4H EMA; the green wave) as support.

For instance, the cryptocurrency crashed by over 40% on Thursday as Shiba Inu’s addresses worth 1 million–10 million SHIB dumped over 31 billion tokens, the largest in six months, as per Santiment data. However, the price recovered as traders started accumulating SHIB tokens near the 20-4H EMA.

Additionally, Shiba Inu’s ongoing retracement took cues from a potential correlation between the 1million–10 million SHIB address dump and its price. Santiment noted that Shiba Inu’s price rebounds every time after SHIB millionaires dump their holdings, as shown in the chart below.

Shiba Inu supply distribution. Source: Santiment

That shows micro traders’ intention to absorb massive selloffs. 

Retail sentiment moons

The bullish retracement in the SHIB market coincided with a rising number of internet queries for the keyword “Shiba Inu,” as per Google Trends. 

Web data shows a rise in the Shiba Inu trend in the United States on a 12-month interest timeframe, signaling booming retail interest. At 92, the trend is closer to the peak popularity score of 100, last seen in the second week of May. It indicates that more internet users are looking for information on Shiba Inu. 

Google searches for "Shiba Inu." Source: Google Trends

Nevertheless, the internet queries for the keyword “how to buy Shiba Inu” came out to be only 18 in the same period. Nonetheless, compared to the previous week, the interest shot up by 260%.

Tale of two indicators

On a technical front, SHIB’s latest rebound move appears to have invalidated a bearish setup that Cointelegraph discussed in one of its previous coverages.

Related: Shiba Inu is now a top-20 cryptocurrency with SHIB price soaring 300% in 9 days

Specifically, SHIB’s price broke bullish out of an otherwise bearish descending triangle pattern as it closed above the structure’s upper trendline with a rise in trading volume. While the breakout still awaits confirmation, it has boosted the prospects of bullish continuation.

The reason for an extended upside is a makeshift bull pennant, which typically sends the price higher by as much as the height of the previous upside move. In other words, SHIB’s breakout above its bull pennant pattern could send its price to $0.00004713.

SHIB/USDT 4-hour price chart featuring bull pennant setup. Source: TradingView

Meanwhile, should the price slip back inside the pennant range, it would risk reactivating the descending triangle setup. In doing so, SHIB may eye a correction toward $0.00002195, followed by a negative breakout move toward $0.00001000.

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.

XRP price eyes $1.50 next after bouncing 30% in just 10 days

The XRP price chart is painting a golden cross while rising inside an ascending channel.

XRP has a good chance of hitting $1.50 in the fourth quarter of 2021 after painting a bullish crossover between its 20-day and 50-day exponential moving averages (EMA).

The so-called Golden Cross has appeared multiple times on XRP charts in history. Its last occurrence was on Aug. 10, which followed up with a circa 80% price rally later, with XRP topping out seasonally at $1.43 before pulling back to the downside. 

Similarly, a close of XRP's 20-day EMA above 50-day EMA on Feb. 4, coincided with an approximately 400% price rally afterward. In doing so, XRP reached a year-to-date high of $1.98, further attesting that the latest Golden Cross could prompt a similar bullish response from traders.

XRP/USD daily price chart featuring Golden Cross. Source: TradingView.com

More cues for an upside move come from the Rising Wedge pattern. The upper and lower trendlines of the ascending channel pattern has lately served as resistance and support to XRP's price moves. The cryptocurrency's ongoing upside move also followed a strong bounce from the Wedge's lower trendline, as shown in the chart above.

Thus, XRP's potential to stretch its rebound towards the Wedge's upper trendline seems high. That roughly paints a bullish target of $1.50 for XRP.

Ripple vs. SEC

The latest bout of buying in XRP markets also came in the wake of a recent SEC vs. Ripple lawsuit update.

For the uninitiated, the U.S. Securities and Exchange Commission (SEC) filed an action against Ripple Labs and two of its executives in December 2020, alleging that they raised over $1.3 billion through an unregistered securities offering via XRP tokens.

In response, Ripple Labs has been trying to prove that XRP is a utility token—not security—based on the former SEC director William Hinman's speech wherein he noted that Ether, a blockchain token like XRP, is not a security asset.

The current SEC regime argues that Hinman's opinions were personal. But based on recent findings, the U.S. securities regulator may have been lying.

Ripple's legal team recently submitted logs in the court that showed SEC directing its employees to analyze digital currencies as per the framework provided by Hinman. It could prove that Hinman's speech was not a mere personal opinion but an official directive.

Related: Judge rejects XRP hodlers’ bid to join SEC against Ripple case as defendants

Judge Netburn ruled in favor of Ripple Labs and added the proofs to their "in camera" review.

The ruling came out on Oct. 8, which was followed by a 17% rally in XRP price.

Bearish reversal pattern also in pl

XRP's Rising Wedge is a bearish reversal pattern. As a result, the cryptocurrency's gains in the future would face correction risks if the price breaks below the lower trendline.

XRP/USD price chart featuring Rising Wedge breakout setup. Source: TradingView.com

The potential negative breakout risks sending the XRP price as low as the maximum distance between the Wedge's lower and upper trendline. That would put the cryptocurrency's downside target under $0.65.

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.

Shiba Inu is now a top-20 cryptocurrency with SHIB price soaring 300% in 9 days

The Dogecoin spinoff sprinted past popular blockchain protocols like Stellar and Polygon to become an $11 billion crypto project.

The run-up in the price of Shiba Inu (SHIB) so far in October pushed the SHIB token to become the 20th largest digital asset by market capitalization.

Shiba Inu's circulating market valuation jumped to $11.08 billion earlier this week and is currently above $10 billion, putting it in the top-20 by market cap for the first time. As a result, the Dogecoin-inspired meme cryptocurrency became more valuable than popular blockchain projects like Stellar (XLM), Polygon (MATIC), and Tron (TRX).

SHIB market cap versus price. Source: Messari

The growth in Shiba Inu's valuation came on the heels of a tweet published by Elon Musk. On Oct 4, the Tesla CEO posted the picture of his pet dog—a Shiba Inu breed—with the caption "Floki Frunkpuppy." SHIB jumped by more than 40% an hour after the tweet.

Crypto speculators tend to read too much into Musk's tweets. For example, the billionaire entrepreneur was instrumental in pushing Dogecoin (DOGE) price higher earlier in 2021 via Twitter.

SHIB price surged by almost 400% a week after opening the fourth quarter of 2021 at $0.00000725. In doing so, the token retested its five-month high of $0.00003528 on Oct 7.

Nevertheless, SHIB underwent a 40%-plus price correction on the same date as some traders decided to unwind their spot positions for interim profits. As a result, Shiba Inu's market cap fell in tandem, going to as low as $8.06 billion on Friday.

SHIB/USDT daily price chart. Source: TradingView.com

The sell-off across Shiba Inu markets (against the dollar and Bitcoin) prompted buy-the-dip sentiment. A rebound rally ensued, which pushed the SHIB price up by more than 45%. At its highest on Saturday, the token was changing hands for $0.00003020, with its market cap around $10.73 billion.

What is next for SHIB?

Shiba Inu price dropped on Oct. 9 by more than 5% to reach a fresh intraday low of  $0.00002575. In doing so, the cryptocurrency hinted at forming a potential descending triangle pattern, suggesting additional losses ahead.

Related: 'Much ow' ahead? Dogecoin chart fractal puts Shiba Inu's 390% QTD rally in danger

In detail, Descending Triangles are typically bearish patterns that form when the price trends lower while fluctuating between an area defined by two converging trendlines: one falling and the other, horizontal, such as the ones SHIB has formed in the chart below.

SHIB/USDT four-hour price chart featuring descending triangle setup. Source: TradingView.com

The formation of lower highs atop a standstill support line indicates weakening buying sentiment among traders. As a result, the price ultimately tends to break below the horizontal trendline. In doing so, its target shifts to a level at a length equal to the maximum Triangle height. 

In other words, SHIB price may go under $0.00001000 in the coming sessions if the abovementioned support level fails to hold.

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.

Ethereum risks drop below $3.2K as ETH price faces heavy resistance

A confluence of at least three different bearish indicators appears on Ethereum's multi-timeframe charts, suggesting that its ongoing bull run risks exhaustion.

Ethereum's native token Ether (ETH) is at risk of falling below $3,200 in the coming sessions as its rally comes face-to-face with a strong resistance zone.

In detail, the price of Ether swelled by almost 22% on a month-to-date timeframe in the wake of a market-wide price rally. That pushed the second-largest cryptocurrency by market capitalization from under $3,000 to above $3,650 in the first eight days of October, triggering more bullish forecasts.

"Six thousand dollars will happen fast; $10,000 is programmed," noted Twitter-based technical chartist Crypto Cactus. David Gokhshtein, CEO of distributed data network PAC Protocol, predicted a $10,000 upside target for Ether, as well.

But the price of Ether has the potential to ram into a confluence of three notable bearish indicators that could limit its upside moves and pare a portion of its recent gains.

Two resistance zones and a rising wedge

The three bearish indicators that could prompt Ether to undergo a bearish reversal are a rising wedge, a descending trendline resistance, and an interim resistance bar, as shown in the chart below.

ETH/USD 4H price chart featuring bearish confluence. Source: TradingView.com

A rising wedge surfaced as ETH rallied and left behind a sequence of higher highs and lower lows. Meanwhile, the cryptocurrency's uptrend happened against decreasing volume, showing a lack of bullish conviction among traders. 

Additionally, the structure's apex—the point at which its two trendlines converge—is around two historical resistance zones. The first one is an interim resistance bar, as shown in the chart above, that previously called out ETH's top above $3,650.

At the same time, the second resistance is a descending trendline, visible more clearly in the daily chart below at around $3,800.

ETH/USD daily price chart showing the descending trendline resistance. Source: TradingView.com

As a result, the rising wedge's apex and the two resistance trendlines pose bearish reversal risks to Ether. Should it happen, the Ethereum token will crash by as much as the maximum height between the wedge's upper and lower trendlines.

Related: 3 factors that can send Ethereum price to 100% gains in Q4

That puts it en route to below $3,200, which served as an accumulation zone for Ethereum traders in the first half of September 2021.

Activating inverse head and shoulder?

A drop towards or below $3,200 does not necessarily push Ether into a full-fledged bearish cycle. Conversely, it could trigger a bullish inverse head and shoulder setup.

ETH/USD 4H price chart featuring a potential inverse head and shoulders pattern. Source: TradingView.com

If the setup plays out as intended, traders' accumulation of ETH tokens will increase near $3,200, causing a rebound toward the neckline area in the chart above. In doing so, the ETH price would place its inverse head and shoulder target at a length equal to the maximum distance between the pattern's neckline and bottom.

That would put Ether en route to new all-time highs of approximately $4,500.

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.

‘Much ow’ ahead? Dogecoin chart fractal puts Shiba Inu’s 390% QTD rally in danger

SHIB is notably mirroring its mentor Dogecoin's price moves from the Feb.–April 2021 session, raising possibilities of dump ahead.

Shiba Inu (SHIB) has emerged as one of the best investments heading into the fourth and final quarter of 2021, with its price rising by over 390% in the first week of October. Nonetheless, the spin-off meme cryptocurrency now risks wiping most of those gains in the coming sessions.

Yuriy Bishko, a Ukraine-based market analyst, discussed the potential bearish scenario based on Shiba Inu's recent price trends, which appear eerily similar to those recorded in the Dogecoin (DOGE) market earlier this year.

For instance, SHIB's October price rally followed five months of consolidation inside a $0.00000398-wide price range. Similarly, DOGE's sideways trend in Feb-April 2021, wherein its bids bounced between $0.0471 and $0.0630, served as a basis for a 500%-plus price rally in late April.

DOGE/USDT versus SHIB/USDT daily price chart. Source: Yuriy Bishko, TradingView.com

Bishko said that traders who bought Shiba Inu tokens during its sideways consolidation phase should sell at least 20%–30% of their positions if they are still holding after the rally. Meanwhile, if SHIB's net breakout stretch exceeds 500%, then traders should dump another 70%–80% of their net holdings.

That is mainly because Dogecoin's supersonic price rally in late April resulted in a circa 60% correction. Bishko added:  

"If SHIB repeats the same pattern, [traders] can buy more coins at a 60% discount."

SHIB resumes uptrend

The profit-taking strategy appeared as Shiba Inu resumed its uptrend Friday after falling 41% in a price correction in the previous session.

SHIB rallied almost 27.5% to hit an intraday high of $0.00002919, much in line with similar upside moves across all the top crypto assets, including Bitcoin (BTC) and Ether (ETH). Small-cap tokens typically tail trends in the top-cap markets; for instance, SHIB's 390% quarter-to-date (QTD) price rally coincided with Bitcoin's 30% upside move in the same period. 

SHIB/USDT daily price chart. Source: TradingView.com

At the same time, Shiba Inu's daily relative strength index (RSI) identified the cryptocurrency's current price valuations as overbought. Analysts consider an RSI reading above 70 as excessively valued for an asset, typically following up with either a price correction or sideways consolidation.

Bleeding Crypto, a Twitter-based independent market analyst, anticipated that SHIB would retest its sessional high of $0.00003528. The pseudonymous analyst cited a Fibonacci retracement graph behind its bullish continuation setup, noting that SHIB's ability to rebound strongly after falling almost 50% meant that "it's going back to business."

Shiba Inu's fundamentals seem to agree.

As Cointelegraph covered earlier, the team behind the cryptocurrency has been attempting to become a contender in the DeFi space. In detail, it launched ShibaSwap, a decentralized cryptocurrency exchange platform, in early July 2021, which now has over $360 million locked inside its liquidity pool.

Related: Is Dogecoin set to follow Shiba Inu’s (SHIB) 400% breakout?

Moreover, the Shiba Inu speculators have also been showing interest in the next week's launch of 10,000 nonfungible tokens (NFTs), dubbed "Shiboshi." 

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.

CME Bitcoin derivative traders had ‘paper hands’ as BTC broke $55K — Report

Traders wound up their long Bitcoin derivatives contracts ahead of the October price rally, ignoring solid on-chain fundamentals.

Bitcoin (BTC) derivatives traders on the Chicago Mercantile Exchange (CME) missed out on incredible profits as BTC’s spot price smashed through $55,000 this week.

Retail investors reduced their long exposure across the Bitcoin futures and options markets in late September, according to data shared by Ecoinometrics. The amount of open short positions also climbed, indicating that derivative traders anticipated Bitcoin’s price to drop, as shown in the chart below.

CME Bitcoin derivatives — retail traders. Source: CFTC “Commitments of Traders” report, Ecoinometrics

The data was taken on Sept. 28, when BTC price had fallen below $41,000 on Coinbase — down almost 23% from its month-to-date high near $52,950. The drop surfaced in the aftermath of China’s decision to ban all kinds of crypto transactions.

“Most likely, this dip is due to a mix of traders not rolling their long positions to the October contract and some outright liquidating when BTC looked like it was going to drop below $40k last week,” said Nick, an analyst at Ecoinometrics.

“Regardless, the overall picture is that the futures traders lack conviction.”

“That’s paper hands 101,” the analyst noted.

Smart money

Institutional investors in the CME Bitcoin futures market also followed retail sentiment as they reduced their long exposure in the market. But, on the other hand, their short positions climbed.

CME Bitcoin derivatives — smart money. Source: CFTC “Commitments of Traders” report, Ecoinometrics

With CME options traders convinced that Bitcoin price would drop, the number of puts — an implicitly bearish bet on Bitcoin’s price — turned out to be almost twice the size of the calls, or bets on potential Bitcoin price gains.

CME Bitcoin options — puts vs. calls open interest. Source: Ecoinometrics

Traders’ position distribution made $40,000 the most sought-after strike price target.

On the other hand, some options traders bet that the spot Bitcoin price would hit $60,000 by the end of October. Additionally, analyst Crypto Hedger highlighted that Bitcoin options expiring on Nov. 26 show bulls’ sentiment skewed toward the $80,000-strike target.

Buy/sell volume in the last 24 hours for Nov. 26 Bitcoin options contract. Source: Laevitas, Crypto Hedger

“At this current growth pace, Bitcoin has formed very strong support at the $50,000 price point, and short-term traders may also need to watch out for the key resistance level around $56,000,” said Konstantin Anissimov, executive director of CEX.IO, adding:

“A break below or above these levels can stir another cataclysmic price reversal or a massive run toward $60,000 in Q4.”

Bitcoin supply squeeze in play

On-chain data shared by Ecoinometrics also showed a higher level of Bitcoin withdrawals from all the crypto exchanges.

In detail, Bitcoin’s 30-day net exchange flow has been rising since July 2020, as noted in the color-coded chart below, with blue and red indicating extreme outflow and inflow, respectively.

Bitcoin rolling net exchange flow. Source: Coinmetrics

Ecoinometrics noted that the amount of Bitcoin currently leaving exchanges is higher than it was in the previous four-year halving cycles.

Bitcoin rolling net exchange inflow (second halving vs. third). Source: Coinmetrics 

Meanwhile, traders see the reduction in Bitcoin’s supply on exchanges, with increasing “hodling” activity, as further catalysts for a liquidity crisis and more price upside.

Related: Bitcoin ‘heavy breakout’ fractal suggests BTC price can hit $250K–$350K in 2021

“Back then there were indeed periods of net outflows but in terms of size they look much less dramatic than what we have right now,” Ecoinometrics highlighted, adding:

“That’s another sign that we are on course for a liquidity crisis which could drive Bitcoin’s value much higher than it is right now.”

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, and you should conduct your own research when making a decision.

Is Axie Infinity overheating? AXS price hits record high following 100% QTD rally

The gaming token, which reached $150 in the early UTC hours of Monday, risks correcting below $90 as a key technical indicator identifies its overbought conditions.

AXS, the native token of Axie Infinity, a play-to-earn nonfungible token (NFT) game built atop the Ethereum blockchain, rallied more than 100% on a quarter-to-date (QTD) timeframe to refresh a new record high above $155.

Nonetheless, the cryptocurrency now risks paring a portion of its recent gains as a key technical indicator, dubbed the relative strength index (RSI), flashes its overbought conditions. In doing so, it might correct below $90 — almost a 40% drop.

The bearish outlook surfaces after studying the relationship between AXS’s price and its RSI readings. In detail, when the RSI rallies above 70, it mostly prompts AXS to either consolidate sideways or lower later.

But in either case, the token ends up testing its 20-day exponential moving average (20-day EMA; the green wave in the chart below) as an interim support level.

AXS/USD daily price chart featuring its response to RSI readings above 70. Source: TradingView

For instance, RSI has closed above 70 three times since July 1, 2021, and each time prompted the price to hit its 20-day EMA within seven to 30 days. That made buying AXS against an overbought RSI reading a risky preposition for traders, increasing their probability of facing short-term losses.

As a result, the Axie Infinity token could go through a similar bearish trajectory in the days/weeks ahead, with its next downside target sitting around $87. Nonetheless, if the price rallies further ahead, as happened after July’s overbought signal, AXS’s bearish target could move to or above $90.

Is hodling a better strategy?

The 20-day EMA served as a buy indicator for traders following the RSI-led corrections. In detail, traders decided to buy the dip in anticipation that AXS’s price would retest and close above its previous high levels.

Therefore, it is visible that traders who did not sell their AXS holdings during the price corrections toward the 20-day EMA managed to earn decent paper profits — the Axie Infinity token has climbed more than 2,500% since July 1.

AXS’s growing utility inside the Axie Infinity virtual world, called Lunacia, has emerged as one of the primary catalysts behind its demand among gamers and traders. In detail, players maneuver colorful creatures called Axies to earn two kinds of tokens.

The first, known as Small Love Potions (SLP), is awarded for successful battles; it can be cashed out or be reused to breed new Axies. Meanwhile, the second token, AXS, can be earned by winning seasonal tournaments or selling Axies in Axie Infinity’s dedicated in-house marketplace.

As of Monday, Axie Infinity’s active user count tallied to 1.85 million, up over 4,500% since April, with its total cumulative revenue climbing to $815 million in the same period, as per Token Terminal. That made Sky Marvis, the firm behind Axie Infinity, the fifth-most valuable video game company globally by market capitalization.

Top gaming companies in the world. Source: Messari

The strong fundamentals have intensified traders’ confidence in AXS, which explains its ability to bounce back every time after undergoing a sharp correction toward its 20-day EMA.

AXS staking service, DEX launch

The latest bout of buying in the Axie Infinity markets also surfaced due to a new feature that allows AXS holders to stake their tokens to earn yields. Since its launch on Thursday, the staking feature has attracted more than 12.44 million AXS tokens (~$1.88 billion at current rates).

AXS staking dashboard. Source: Axie Infinity

Staking effectively takes active token supply out of circulation, which, against a rising demand for the asset, tends to push its prices higher. 

Related: Massive airdrop and AXS staking catapult Axie Infinity to a new all-time high

Meanwhile, Sky Mavis announced that it would launch a decentralized exchange on Ethereum-linked sidechain Ronin. In doing so, the company aims to ensure faster AXS and SLP liquidity to players during gameplay without needing to rely on cross-chain bridges to purchase or swap tokens.

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.

Ethereum fractal from 2017 that resulted in 7,000% gains for ETH appears again in 2021

The eerie deja vu scenario can see Ethereum hit $13,000 within six months if history repeats.

Bids for Ethereum's native token Ether (ETH) could rise to $13,000 in the next two months if history repeats.

So shows a fractal indicator from 2017, consisting of at least four technical patterns that were instrumental in pushing the ETH price up by over 7,000%. The same set of bullish indicators have flashed once again in 2021 as Ether trades above $3,350 after rallying over 360% year-to-date.

The 2017 Ethereum fractal, explained

In detail, the four technical indicators are Stochastic RSI, Relative Strength Index (RSI), Bullish Hammer, and a Fibonacci retracement level. It started with the Bullish Hammer's occurrence on Ether's monthly chart in December 2017, followed by a 7,000% price rally in the next six months.

The Hammer-led massive upside move pushed Ether's monthly RSI to over 94, an extremely overbought zone. As a result, the cryptocurrency started consolidating sideways to neutralize its excessively bullish sentiments. RSI started correcting lower.

In parallel, Ether's monthly Stochastic RSI indicator, which compares its closing price with the price range over a given period, also started correcting lower after identifying the cryptocurrency as overbought (a reading above 80 is considered excessively bought and below 20 is considered excessively sold).

Ethereum 2017 fractal indicator. Source: TradingView.com, Jaydee_757

Later, in November 2017, the Stochastic RSI flipped bullish, with its %K line (the blue one), which compares an asset's lowest low and the highest high to define a price range, crossing above the %D line (the saffron line), which is a moving average of %K. Meanwhile, the Stochastic RSI reading was above 20 at the time of flip, which boosted Ether's bullish continuation hopes.

Later, the Ethereum token surged by another 500%, closing above $1,200 in Jan 2018. It coincided with RSI forming a double top, as shown in the chart above. The entire bottom-to-top took place inside an ascending channel range, with its 23.6% Fibonacci retracement level serving as support/resistance level.

The 2021 fractal repeat so far

Ether is almost mirroring the moves from the 2017 fractal as it heads into the final quarter of 2021, albeit without order.

In detail, the Ethereum token rallied by 3,400% to over $4,300, sixteen months after painting a bullish Stochastic RSI cross (when its a %K line surged above the %D line). Meanwhile, the huge upside move—again—pushed Ether's monthly RSI into its overbought zone.

Ethereum 2017 fractal indicator versus 2021. Source: TradingView.com, Jaydee_757

A consolidation period followed, which saw Ether making a Bullish Hammer in July 2021, suggesting sellers had formed a price bottom. 

Jaydee_757, the pseudonymous analyst who first spotted the Ethereum fractal, highlighted the hammer's potential to send the Ether price flying, with a primary upside target sitting near the 2.618 Fib line (at around $13,000).

Related: 3 factors that can send Ethereum price to 100% gains in Q4

The bullish analogy also took cues from a potential Stochastic RSI bullish cross and a double top RSI, waiting to appear on Ether's monthly chart in the next "few months," similar to the one that coincided with the 500% price rally in 2018, as mentioned above.

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.

3 factors that can send Ethereum price to 100% gains in Q4

The three bullish indicators converge as Ethereum's native token Ether climbs over 9% Friday to cross $3,000, its psychological resistance level.

Ethereum's native token Ether (ETH) has the potential to double its market valuation in the coming months, thanks to a confluence of supportive technical and fundamental indicators.

Ether price soared by more than 9% Friday to hit nearly $3,300 for the first time in ten days. Its gains surfaced primarily in the wake of a price rebound across all the top cryptocurrencies, including Bitcoin (BTC), which gained 9.5% to hit $48,000, the highest level in 10 days.

Ether-Bitcoin correlation against rising U.S. inflation

Friday's crypto market boom coincided with the release of the U.S. Commerce Department's report on consumer spending.

The data showed that the U.S. core personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, rose by 0.3% in August and was 3.6% up year-over-year. Thus, the core inflation surged to its highest levels in 30 years.

Speculators tend to treat Bitcoin as a hedge against inflation, which explains the benchmark cryptocurrency's latest response to the higher consumer prices in the U.S.

Meanwhile, Ether's 30-day average correlation with Bitcoin sits near 0.89, as per data provided by CryptoWatch, which prompted ETH to move almost in lockstep with BTC.

BTC/USD versus ETH/USD daily price chart. Source: TradingView.com

A University of Michigan survey conducted between Aug. 25 and Sept. 27 found that the longer-term inflation expectations among U.S. consumers rose to 3%, the highest in a decade.

The outcome appeared in contrast with the Federal Reserve's Chairman Jerome Powell's views; he rubbished the rising inflation as "transitory" for months but admitted during a recent Senate hearing that the higher consumer prices might stay intact at least until the next year.

As a result, inflationary pressures gave crypto bulls the reason to pitch Bitcoin as an ultimate hedge, with MicroStrategy CEO Michael Saylor suggesting corporates convert their cash-based Treasury into BTC.

MicroStrategy holds about 0.5% of the total Bitcoin supply in circulation, currently worth over $6 billion.

Supply squeeze

Ethereum went through a network hard fork upgrade on Aug. 5 that further raised the bullish outlook for Ether, owing to the classic supply-demand law.

Dubbed London Hard Fork, the upgrade introduced an improvement protocol, EIP-1559, that started burning a portion of Ethereum's network fee, called Base Fee. So far, the EIP-1559's activation has removed 410,404 ETH (~$1.32 billion) out of active supply permanently, as per WatchTheBurn.com.

Ethereum is also preparing to switch its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS). As a result, it has launched a staking pool that would allow users to earn rewards and grow their ETH holdings if they lock 32 ETH into their official PoS smart contract for a certain period.

So far, the amount of ETH deposited in the so-called Ethereum 2.0 staking contract has surged from around 11,500 in November 2020 to 7.82 million ETH today. That said, the transition has effectively removed 7.82 million ETH out of circulation temporarily.

Total ETH stakes in Ethereum 2.0 smart contract. Source: CryptoQuant

On the other hand, the total amount of Ether tokens held across all the crypto exchanges have dropped to their record lows. Data from CryptoQuant shows that exchanges now held only 18.1 million ETH compared to 23.73 million ETH an year ago.

Ether reserves across all crypto exchanges. Source: CryptoQuant

The declining ETH reserves show that traders may want to hold their Ether tokens than sell them for other assets. As a result, it creates a supply squeeze for investors looking to enter the Ethereum markets, thus making ETH more valuable.

Cup and handle

A mix of lower supply and higher demand serves as a bullish backstop for the Ether price. Meanwhile, more evidence for an upside breakout comes from a cup and handle pattern on Ether's longer-timeframe charts.

Related: Ethereum bears look to score on Friday’s $340M weekly ETH options expiry

The Cup and Handle is a bullish continuation pattern, comprising a rounding bottom and a descending channel setup, as shown in the chart below. The structure's profit target is typically at length equal to the Cup's maximum height.

ETH/USD daily price chart featuring cup and handle pattern. Source: TradingView.com

Considering the Cup's resistance level is at near $4,000, a breakout from there expects to send the ETH price to above $6,000, almost double its current rate.

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.

Bitcoin history repeating? 3 indicators suggest October will reignite the BTC bull market

The flagship cryptocurrency has closed October in profits seven out of nine times since 2013, raising hopes that it would be able to log a fractal bull run in the next 31 days.

Bitcoin (BTC) failed to break the so-called September curse as its price fell by a little over 7% into the month despite a strong rebound rally right ahead of its close. Nonetheless, Bitcoin looks to be making a comeback in October, a month known for painting aggressive bullish reversals.

Bybt data shows that Bitcoin has closed October in profits the majority of the time since 2013 — with a success rate of over 77%. Last year, the cryptocurrency surged by 28% to reach levels above $13,500 after finishing September at around $10,800, following an approximate 7.5% decline.

Bitcoin monthly returns since 2013. Source: Bybt

Similarly, Bitcoin had climbed higher by over 10% by the end of October 2019 despite plunging by around 14% in the previous month. That made September look like a sell-off month for traders, with its record of logging losses seven out of nine times since 2013.

In contrast, October posed itself as a period of dip-buying, suggesting that traders may end up pumping Bitcoin’s price higher by Oct. 31.

The October fractal surfaces despite alarming signals in the form of China’s intensifying crackdown and the United State’s tougher regulatory stance on the crypto sector.

Additionally, the prospects of the Federal Reserve limiting its $120-billion-a-month bond-purchasing program later this year appear to have been limiting Bitcoin’s upside outlook. The loose monetary policy, combined with the U.S. central bank’s near-zero interest rates, was instrumental in pumping Bitcoin’s price rally from below $4,000 in March 2020 to almost $65,000 by April 2021.

But despite the short-term setbacks, a flurry of key indicators revealed that investors still want exposure in the booming cryptocurrency space.

Institutional inflows

Crypto data tracking service CryptoCompare noted in its report that volumes associated with digital asset investment products rose 9.6% in September. Meanwhile, the weekly product inflows rose to $69.7 million, the highest since May 2021.

“Bitcoin-based products saw the highest level of inflows out of any asset, averaging $31.2 million per week,” CryptoCompare wrote, adding that “there could be upside going into the last quarter of 2021.”

Average weekly net inflow by asset for the month of September. Source: CryptoCompare

The 20-week EMA fractal

Technical indicators also pointed to a bullish session ahead for Bitcoin as it formed a base around $40,000 before the September close and reclaimed key resistance levels as interim support. That included the bias-defining 21-week exponential moving average (21-week EMA).

As Cointelegraph covered earlier, a drop below the 21-week EMA increased Bitcoin’s probability to continue falling by 78%. On Sept. 27, the cryptocurrency fell below the green wave (as shown in the chart below) but reclaimed it as support while entering the October session.

BTC/USD weekly price chart featuring 20-week EMA-focused bull runs. Source: TradingView

A move above the 20-week EMA, accompanied by rising volumes, has historically led to explosive Bitcoin bull runs. As a result, if the fractal repeats, the BTC price may head toward a new record high in the sessions ahead.

Bull pennant breakout

Another technical indicator that has been predicting a bullish outcome for Bitcoin is bull pennant.

Related: Analyst nails Bitcoin monthly close 2 months running — His October target is $63K

In detail, BTC’s price has been consolidating inside two converging trendlines following its 500%-plus rally.

Traditional analysts view these lateral moves as a sign of bullish continuation. In doing so, they anticipate that the price will break above the pattern’s upper trendline — and rise by as much as the length of the previous uptrend, called the flagpole.

Bitcoin weekly price chart featuring bull pennant structure. Source: TradingView

As a result, Bitcoin’s path of least resistance appears to be to the upside, with a potential breakout move looking to send its prices toward $100,000 (flagpole’s height is roughly $50,000).

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.

Bitcoin price eyes $50K as the US Dollar retreats after hitting its one-year high

Rising jobless claims in the U.S. sparked selloffs in the dollar market. On the other hand, Bitcoin held onto its intraday gains.

Bitcoin (BTC) looks to reclaim $45,000 on Oct. 1 as the U.S dollar retreated lower after hitting its one-year high. Bitcoin's tight inverse correlation with the greenback over the past month suggests that a weakening dollar could push BTC price even higher in the coming sessions. 

Bitcoin-dollar correlation on hourly chart. Source: TradingView.com

Dollar drops following labor market shock

In detail, the U.S. Dollar Index (DXY), which measures the greenback's strength against a basket of six foreign currencies, including euro and sterling, hit $94.50 Thursday for the first time since Sept. 28, 2020. But it retreated on news of rising U.S. jobless claims against the forecasts of a decline.

The labor data released Thursday showed that the number of jobless claims rose to 362,000 last week against 351,000 a week earlier and against the economists' projection of 333,000. As a result, the number of reapplications got stuck around 2.8 million for five weeks in a row.

For the markets, this could be the news that the Federal Reserve might delay tapering its $120 billion asset purchasing program from November to a later month, thus keeping interest rates lower and the dollar's renewed strength temporary.

DXY daily price chart. Source: TradingView.com

The index was trading at 94.263 at the time of this writing.

Technical outlook projects Bitcoin higher, dollar lower

Technicals also showed the greenback facing the prospect of a correction ahead. For example, independent market analyst TradingShot spotted the dollar index inside a Megaphone pattern, about to get topped out to pursue a correction in the coming sessions, as shown in the chart below.

US dollar index daily price chart featuring Megaphone technical setup. Source: TradingShot, TradingView.com

"Based on the 1D relative strength index (RSI), it appears that DXY is right at the top of the formation as [it was] on Aug 15, 2018," TradingShot wrote.

"DXY is building up a strong pull-back to the bottom of the Megaphone."

Meanwhile, a recent bout of selling in the Bitcoin market lately had it paint a Falling Wedge pattern. In detail, Falling Wedges appear when the price trends lower inside a channel comprising of two diverging, descending trendlines.

Traditional analysts see the Falling Wedge pattern as a bullish reversal indicator, noting that a break above its upper trendline moves the price higher by as much as the maximum distance between the Wedge's trendlines.

BTC/USD daily price chart featuring falling wedge setup. Source: TradingView.com

The structure's maximum height is roughly $10,000. As a result, the Bitcoin price can at least retest $50,000 should the Wedge breakout play out as intended.

A weaker dollar means stronger Bitcoin

On the other hand, the underwhelming jobs report could boost investors' interim appetite for Bitcoin. 

Related: Bitcoin’s sharp fall from $50K linked to stronger US dollar, gold — Correlation shows

Vasja Zupan, president of Matrix Exchange, told Cointelegraph that the dollar's weakness and devaluation against rising inflation would continue to make investors put their excess cash in crypto markets. He said:

"Bitcoin in its core proposition has an integrated hedge against inflation and therefore persistently higher inflation in the U.S. can only push it upwards. Therefore, in the long term, the dollar's worth will continue to be lesser than Bitcoin.

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.

Ethereum miners are hoarding a record $70B in ETH following EIP-1559 activation

The Ethereum block producers accumulated $6.1 billion worth of ETH tokens after the Aug. 5 network upgrade.

An on-chain study released by Kraken Intelligence highlighted strong accumulation behavior among Ethereum miners even as they faced the prospects of generating lower revenue following a major network upgrade on Aug. 5, 2021.

Ethereum miners accumulated an additional 2 million Ether (ETH) worth $6.1 billion after the so-called London Hard Fork's activation. The latest bout of accumulation caused miners' net Ether holdings to hit an all-time high of 22.3 million ETH (worth nearly $70 billion), which is almost 19% of the total Ether supply.

"ETH accumulation was stagnant for most of the summer before picking up speed in July in spite of ETH price trending lower," the Kraken report read.

"However, ETH accumulation amongst miners really took off after EIP-1559 as they likely saw the disinflationary effects of the upgrade to drive up price."
Ethereum miner supply. Source: Kraken Intelligence, Coin Metrics

Miners snub EIP-1559 FUD

EIP-1559, which went live alongside the London Hard Fork on Aug. 5, divided transaction fees (chargeable via native token ETH) into two parts: Base Fee and Priority Fee.

The network started charging base fees to add transactions to the Ethereum blocks. Meanwhile, it introduced priority fees—or voluntary tips—that Ethereum users pay to miners to speed up transactions.

But EIP-1559 changed the way Ethereum's token economy works by introducing a fee-burning mechanism. In doing so, the improvement proposal started burning the base fee, thereby making ETH a disinflationary asset by permanently removing a part of its supply out of circulation.

Burning a portion of total fee collection would also mean a drop in revenue for Ethereum miners. As a result, EIP-1559's launch sparked warnings about lower mining profitability, with one study finding that miners' revenue dropped by 15% right after EIP-1559 went live.

But that didn't deter the miners from raising their exposure in the Ethereum market, insofar that ETH's hash rate reached a record high of 736.67 terra-hash per second (TH/s) on Sept. 23.

Ethereum network hashrate performance in the last 12 months. Source: YCharts

That is despite a drop in Ethereum mining activity following China's crypto crackdown in May, which later led the hash rate to a three-month low of 477.54 TH/s. Kraken wrote:

"This tells us that not only was the reaction to the China crackdown exaggerated, but miners also view the latest upgrade as an overall boon for ETH that outweighed the con of its miner reward reduction."

NFT boom, staking sentiment behind the mining boom

Ethereum miners survived the EIP-1559 FUD primarily due to rising ETH prices and high network demand led by a boom in the nonfungible token (NFT) space.

Kraken noted that miner revenue reached a near four-month high of $70 million on Sept. 7, rising 27% a month after the Aug. 5 upgrade as "NFT activity in projects such as PALS, Loot, and Junkies likely pushed priority fees higher."

Ethereum miner revenue. Source: Kraken Intelligence, Coin Metrics

But a recent slump in the NFT sector, led by strong corrections in the number of its daily active users (-23%), trading volume (83%), and transaction count (-31%), also pushed the miner revenue down.

Nonetheless, the amount of ETH held by miners surged to its highest level to date, prompting Kraken to deduce that they were accumulating and mining Ether tokens to become validators on the upcoming Ethereum proof-of-stake chain, dubbed Ethereum 2.0.

Users need to stake 32 ETH into Ethereum 2.0 smart contracts to become validators on its network. In response, they may earn up to a 5% annual percentage rate. As of Sept. 29, ETH 2.0 had attracted 7.813 million ETH worth $2.85 billion by 48,780 unique depositors, as per data provided by CryptoQuant.

Related: Ethereum balance on crypto exchanges hits new lows as ETH price retakes $3K

Meanwhile, as more Ether tokens go out of actively supply due to staking and EIP-1559 activation, the prospect of holding ETH might appear profitable for miners due to classic supply-demand model. 

Ether was trading at $3,006 at the time of writing, up more than 300% year-to-date.

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.

DYDX gains 80% in a week — What’s driving the DEX token rally?

Traders raised their bids for the decentralized exchange token, believing it would benefit from China's decision to classify all crypto transactions as "illegal."

Decentralized exchange dYdX's native token DYDX surged by nearly 80% this week as traders assessed its potential against China's recent ban on crypto transactions.

The DYDX price hit a new high of $26.50 on the FTX exchange after trading at around $13 a week ago. The China ban was an apparent boost for the dYdX decentralized exchange (DEX) that offers perpetuals, margin and spot trading, as well as lending and borrowing services to its users.

Holding DYDX gives owners the right to propose and vote on changes to dYdX's layer 2 protocol. DYDX stakers receive rewards by depositing to the DEX's related liquidity staking pools. Users also benefit by receiving a discount on trading fees that are based on the size of their DYDX reserves.

DYDX distributed—or airdropped—DYDX tokens among its users based on their activity on its DEX platform. The lowest tier, which had traded as minimal an amount as $1 on the exchange, received 310 DYDX. Meanwhile, those who traded more than a million-dollar worth of digital assets on dYdX received 9,529 tokens.

As a result, many traders who held onto their free DYDX tokens earned more than $245,000 in profits as the cryptocurrency reached its record high of $26.50 Wednesday. One of the traders—who received DYDX by having more than one account on dYdX—made about $900,000.

While the price per token corrected by more than 10% later, its daily returns were still positive, showing traders' intent to speculate more on DYDX's bullish bias in the sessions ahead.

China FUD attracts new users

One of the primary reasons behind their bullish bias was China. The People's Bank of China released a notification on Sept. 24 that banned all kinds of crypto-related transactions. In response, crypto assets fell, including top assets Bitcoin (BTC) and Ether (ETH).

But among the worst-hit cryptocurrencies were Huobi Token (HT) and OKB, natives tokens of China-focused centralized exchanges, Huobi and OKEx, respectively. While the HT price lost 52.64% two days after the PBoC's announcement, the OKB price dropped by as much as 43.87% in the same period.

OKB/USD and HT/USD daily price chart. Source: TradingView.com

The tokens fell as Huobi and OKEx closed their over-the-counter operations in China and stopped accepting Chinese users on their platform.

On the other hand, dYdX volumes boomed to record highs, raising anticipations that China-based traders are moving their activities to exchanges that have no central intermediaries and that do not practice Know-Your-Customer, or KYC, procedures.

dYdX trading volume (in dollars). Source: Token Terminal

As of Monday, dYdX facilitated over $4.3 billion worth of trades, compared to Coinbase’s $3.7 billion. 

DYDX/USD daily price chart. Source: TradingView.com

Technical outlook

DYDX price has the potential for more upside, based on a supportive technical indicator.

Dubbed as Bull Flag, the bullish continuation pattern emerges when an asset consolidates lower inside a descending channel following a strong upside move. In doing so, it attempts to break bullish out of the downside structure.

Related: DeFi farmers boast about gaming dYdX airdrop as prices surge

When it does, the price tends to rise with length equal to the scale of the previous uptrend. So it appears, DYDX ticks all the boxes when it comes to forming a Bull Flag on its 15-minute chart, as shown below. 

DYDX/USD 15-minute price chart. Source: TradingView.com

As a result, DYDX now now eyes a run-up towards or above $27.

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.

Here’s why Bitcoin mining stocks have been outperforming BTC price in 2021

One of the crypto mining stocks delivered more than 1,600% returns year-over-year (YoY) while Bitcoin's gains in the same period came out to be around 290%.

Bitcoin (BTC) might have outperformed traditional financial markets regarding investment returns, but the cryptocurrency still fell behind Bitcoin-related companies.

The price of BTC climbed by about 290% year-over-year, wherein it surged from $10,695 to a little over $42,000. In comparison, shares of Marathon Digital Holdings (MARA), one of the largest North American crypto mining companies, rose by 1,641% in the same period.

MARA stock weekly price chart. Source: TradingView.com

Institutions-led pump

More crypto mining firms outran spot BTC prices in terms of YoY returns. For instance, Canada-based Bitfarms (BITF) surged 1,736%, while Hut 8 Mining (HUT) and Riot Blockchain (RIOT) rallied by 1,010% and 913% in a year.

The performance of spot Bitcoin versus crypto-focused stocks in a year. Source: Ecoinometrics

Nick, the founder of Ecoinometrics, a crypto-focused newsletter service, called mining stocks an "obvious pick," noting that they gave institutional investors indirect exposure to Bitcoin markets. 

"I bet a lot of institutional investors haven't yet dipped their toes in trading spot BTC, mostly for compliance reasons," the analyst explained in an article published Sept. 27, adding:

"It is a bit like the gold miners when back in the days it was complicated to get your hands on physical gold. So the play for these guys has probably been, stay away from spot but trade the stocks."

The statements surfaced as Morgan Stanley reported in its securities filings that it had more than doubled its exposure in Grayscale Bitcoin Trust (GBTC), a traditional investment vehicle for digital asset investors.

In detail, the Morgan Stanley Europe Opportunity Fund owned 58,116 shares of the Grayscale Bitcoin Trust, or GBTC, as of July 31.

In July, Cathie Wood's Ark Invest also purchased more than 450,000 GBTC shares worth about $1.4 million. In line with mining stock performances, these investments showed an increase in institutional appetite for crypto-focused yet traditional investment products.

Nick added that investors would keep adding their capital into crypto mining stocks as long as they don't see a viable alternative, such as an exchange-traded fund in the U.S.

Scaling and hodling

Demand for mining stocks grows higher as a majority of firms focus on two important prospects: scaling and holding.

For instance, Marathon reported in its non-audited August report that it had received 21,584 top-tier Bitcoin mining ASIC machines from Bitmain in 2021, adding that it is due to get 5,916 more currently in transit. As a result, the company expects to run at least 133,000 Bitcoin mining machines by the middle of next year.

Meanwhile, Marathon noted that it now holds 6,695 BTC, including the 4,812.66 BTC it purchased in Jan 2021. As a result, the fair market value of Marathon’s current bitcoin holdings is now around $333.4 million, giving the firm adequate capital to scale up its productions in the future. 

Similarly, Riot Blockchain's August report showed a 451% increase in its Bitcoin mining capacity on a year-over-year basis, helped by its fleet of 22,050 miners, with a hash rate capacity of 2.2 exahash per second (EH/s). The firm mined 441 BTC in Aug 2021.

Related: Miners have accumulated $600M worth of Bitcoin since Feb

Riot noted that it plans to have 25,650 Bitmain machines in operation by early September. It is currently building a new mining facility in Texas.

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.

Bearish Bitcoin fractal with 78% success rate flashes as BTC drops below $43.5K

The flagship cryptocurrency closed the previous week below its 21-week exponential moving average for the 19th time in history, triggering additional selloff risks.

Last week's drop in Bitcoin (BTC) that saw BTC price falling from $47,358 to $43,178 has sparked fears of an extended selloff.

Independent market analyst Nunya Bizniz highlighted a bearish fractal on Bitcoin's weekly charts concerning its 21-week exponential moving average (EMA).

In detail, the cryptocurrency has closed below the said support zone 18 times to date but retained its previous bullish bias only four times out of all—as shown by the dotted vertical lines in the chart below.

BTC/USD daily price chart featuring its 21-week EMA. Source: Nunya Bizniz, TradingView.com

In the remaining cases, a close below the 21-week EMA led Bitcoin prices extremely lower, barring a fake bearish breakout in August 2015 that soon resulted in a "tremendous bull run," as the analyst noted.

Similarly, Bitcoin's recent break below the wave in May 2021 also crashed prices below $30,000 for the first time since Jan 2021. Nevertheless, the crossover did not result in a full-fledged bearish breakdown; traders bought the dip near $30,000 and led the prices back above $50,000.

But overall, the phenomenon of Bitcoin prices breaking below 21-week EMA caused extended selloff almost 78% of all times.

Bitcoin slips below 21-week EMA, again

Bitcoin closed the week ending on Sept. 26 at $43,178, alerting about its 19th historical decline below the 21-week EMA—which was around $43,502 at the weekly close.

While the fractals envisioned a downside outcome, a close look at the relationship between the 21-week EMA and 50-week simple moving average (SMA)—as shown in the chart below—noted that a potential bearish outlook would need further validation.

That is primarily because of traders' immediate reaction to the two moving averages, especially when the 20-week EMA (the green wave) closes below the 50-week SMA (the blue wave). The so-called Death Cross indicator has previously coincided with further declines in the Bitcoin market. 

Bitcoin price weekly chart featuring 20-50-MA death cross. Source: TradingView.com

For instance, the BTC/USD exchange rate slipped below its 21-week EMA (~$8,041) in the week ending on Jan. 29, 2018, but retained its upside bias until the green wave closed below the blue one. Later, the pair bottomed out near its 200-week SMA (near $3,187).

Similarly, the 20-50 MA death cross in March 2020 came only a week ahead of the infamous Covid-19 selloff, led by the Covid-19 led global market crash. Again, Bitcoin ended up closing near its 200-week SMA (~$5,512), only to bounce back toward new record highs in the sessions later.

Related: JPMorgan CEO says Bitcoin price could rise 10x but still won’t buy it

Therefore, it appears that Bitcoin's potential death cross between its 20-week EMA and 50-week SMA could trigger the next selloff crisis with the ultimate downside target sitting near the 200-week SMA (around $16,000).

At the same time, the Fibonacci retracement levels near $34,712 and $27,580 could keep the Bitcoin prices from getting toward the 200-week SMA. 

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.

Uniswap (UNI) gains nearly 50% in 24 hours as China’s latest crypto purge boosts DEX tokens

In the last 24 hours, the decentralized exchange sector has logged a combined profit of over 60%, while their centralized counterparts have grown by just 0.77%.

Uniswap (UNI) prices staged a solid rebound after crashing last week in the wake of China's decision to intensify its anti-Bitcoin and cryptocurrency rhetoric.

UNI price gained 14.90% on Mon to reach an intraday high of $26.26. The pair's climb came a day after it dropped to a monthly low of $17.63. As a result, it churned out more than 48% profits for the dip buers within the last 24 hours.

Adoption FOMO

UNI serves as a governance token inside Uniswap's decentralized exchange (DEX) ecosystem. As a result, its holders get to vote on matters that help steer the future direction of the DEX platform.

Additionally, UNI holders could also receive a potential revenue share in the future. For the uninitiated, Uniswap's governance contract contains a so-called "fee switch," If activated, it will enable UNI holders to earn a part of the protocol's fees.

Some users already generate revenues by contributing to Uniswap's pools of assets, earning between 0.05% and 1% of the value of each trade in the current version.

Uniswap's liquidity pool schematic. Source: Uniswap Official Doc Page 

Therefore, the prospect of Uniswap growth as a DEX could also mean a higher adoption curve for UNI. And so it appears, China's intensifying crackdown on the crypto industry has boosted the token's appeal among speculators.

The People's Bank of China (PBoC) and other government agencies deemed crypto transactions illegal in an announcement made public on Friday. Meanwhile, they also targeted offshore cryptocurrency exchanges, warning that it was illicit to provide online trading services to Chinese residents.

The move served to fix a loophole that remained in place after PBoC banned all regional financial institutions from offering services to crypto companies. During this time, China-based traders had continued to use off-shore cryptocurrency trading platforms, such as Huobi, Binance, and OKEx.

But decentralized trading platforms like Uniswap attempt to steer clear of governmental jurisdictions by replacing the custodial asset model with a non-custodial one based on smart contracts and multi-signature technology. 

As a result, the recent bout of buying in Uniswap markets has appeared in sync with similar rallies across its top rivaling DEX tokens, as shown in the Messari index below.

Uniswap and SushiSwap (SUSHI) has led DEX gains in the previous 24 hours. Source: Messari

Overall, the DEX index containing 60 assets was up 10.27% around 12:05 UTC, calculated on a 24-hour adjusted timeframe. Meanwhile, the gains of thirteen centralized exchange tokens, including Binance Coin (BNB) and FTX Token (FTT), came out to be only 0.77% in the same period, suggesting traders' sudden FOMO for their DEX rivals.

Centralized exchange tokens in the previous 24 hours. Source: Messari

UNI technicals

UNI prices have been trading lower inside a parallel descending channel that appears to be the 'handle' of a classic Cup and Handle technical pattern.

The setup emerges when an asset forms a rounding bottom (cup) while correcting after a solid move higher. After completing the formation, it trends lower in a descending channel range—which typically leads to a breakout to the upside.

Related: Altcoin roundup: There’s more to DeFi than just providing liquidity

In rising so, the asset sets its bullish target at a distance equal to the Cup's depth.

UNI/USD daily price chart featuring the cup and handle pattern. Source: TradingView.com

UNI ticks almost all the boxes when forming the Cup and Handle Pattern in recent sessions. The Uniswap token now eyes a breakout from its descending Handle channel range, with a profit target set at $17.83 above the cup's resistance level at $48.54.

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.

Ethereum price gets back to $3K as institutional investors pile into ETH futures

Ethereum prices recovered on Sunday amid a market-wide upside correction while receiving an additional upside boost from a bullish JPMorgan & Chase report.

Ethereum's native token Ether (ETH) staged a rebound on Sept. 26 following a massive decline earlier this week that saw its prices plunging to as low as $2,651 on Coinbase.

The ETH/USD exchange rate rose 3.63% to hit an intraday high of $3,030. The upside move amounted to a 14.3% upside retracement from the pair's week-to-date low at $2,651, showing that traders attempted to retain their bullish bias despite potential headwinds ahead.

Last week, Ether prices fell due to a flurry of issues arising from China. On Monday, traders dumped crypto assets en masse after a tumult in China's heavily indebted property market prompted a selloff across global stock markets.

A rebound move ensued later in the week but met with another selloff on Friday after People's Bank of China reiterated that crypto transactions are illegal. Nonetheless, Ethereum bulls maintained their foothold and pushed prices back above $3,000, a psychological resistance level.

ETH/USD daily price chart. Source: TradingView.com

The sentiments were similar across some top crypto assets, with the benchmark cryptocurrency Bitcoin hitting an intraday high of $43,767 on Coinbase following a 2.49% upside move. Meanwhile, Uniswap exchange's native asset UNI also fared higher by more than 19%, becoming the top-performing crypto asset at least in the previous 24 hours.

At the same time, Ethereum's top rivals Cardano (ADA) and Solana (SOL) performed poorly, with ADA/USD dropping more than 5% and SOL/USD losing over 3% on a 24-hour adjusted timeframe.

Institutional demand

Ethereum gains also followed a bullish report thifrom JPMorgan & Chase.  The study noted that institutional investors have started increasing their exposure in Ethereum markets.

Analysts at JPMorgan credited the ongoing craze in the decentralized finance (DeFi) and nonfungible token (NFT) sector as the primary driver behind investors' interest in Ethereum. They added that the 21-day average Ethereum Futures premium climbed to 1% over spot ETH prices, citing the Chicago Mercantile Exchange (CME) data recorded since August.

Ethereum Futures daily price chart. Source: TradingView.com

The JPMorgan report coincided with a record amount of Ether tokens getting withdrawn out of all crypto exchanges, as per data provided by CryptoQuant. At press time, the net ETH reserves on trading platforms had dropped to 18.44 million ETH compared to 23.94 million ETH a year ago.

Related: Ethereum drops more than Bitcoin as China escalates crypto ban, ETH/BTC at 3-week low

Independent analyst PostyXBT also anticipates a potential further price rebound in Ethereum markets, noting that the cryptocurrency's latest declines had pushed it inside a classic accumulation range, as shown in the chart below.

ETH/USD weekly price chart featuring its latest accumulation range. Source: PostXBT, TradingView.com

"Weekly close equally as important for ETH today as price tests the previous range highs as support," the analyst noted.

"Seems like a logical area to make a higher low and I have bought more here for long-term bags/swing trade. RR looks favorable after a 33% correction from the local top."

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.