Markets

Bitcoin derivatives data shows bulls positioning for further BTC price upside

BTC price continues to show strength, and derivatives data suggests that bulls intend to press Bitcoin higher.

Bitcoin (BTC) price maintained the $30,000 support as lower-than-expected U.S. Consumer Price Index (CPI) data was released on April 12. The official inflation rate for March increased 5% year on year, which was slightly less than the 5.1% consensus. It was the lowest reading since May 2021 but is still significantly higher than the U.S. Federal Reserve’s 2% target.

The data suggests that inflation is no longer the driving force behind Bitcoin’s rally, and investors’ focus has shifted from the impact of inflationary pressure to potential recession risks after the banking crisis revealed how fragile the financial system was following the Federal Reserve’s 12-month hike in interest rates from 0.10% to 4.85%.

Aside from the Silicon Valley Bank bankruptcy and the government-backed sale of Credit Suisse to UBS, several warning signs of a macroeconomic downturn have emerged.

The most recent ISM Purchasing Managers Index data fell to its lowest level since May 2020, indicating an economic contraction. According to Federal Reserve documents released on April 12, the aftermath of the U.S. banking crisis is likely to push the economy into a “mild recession” later this year. Because of the crisis, some have speculated that the Fed will hold off on raising interest rates, but officials affirmed that more effort is needed to keep inflation under control.

According to a Moody’s Analytics report, commercial real estate prices fell 1.6% in February, the most since the 2008 financial crisis. Furthermore, the national office vacancy rate reached 16.5%, indicating the severity of the economic difficulties that businesses are currently facing.

Whatever the reason for Bitcoin’s 50% rally between March 11 and April 11, it demonstrates resilience to FUD — fear, uncertainty and doubt — including the Securities and Exchange Commission’s Wells notice against Coinbase on March 22 and the Commodity Futures Trading Commission filing a suit against Binance and its CEO, Changpeng Zhao, on March 27. By holding the $30,000 support, Bitcoin demonstrates that the positive momentum can continue regardless of whether inflation remains above 5%.

Bulls are better positioned for the weekly BTC options expiry

Not everyone is cheering the rally, particularly traders who have placed bearish bets using Bitcoin options. The April 14 open interest for BTC options expiry is $950 million, with $490 million in call (buy) options and $460 million in put (sell) options. Bears have been caught off guard, with less than 7% of their bets exceeding $29,000.

*Bitcoin options aggregate open interest for April 14. Source: CoinGlass*

Below are the four most likely scenarios based on the current price action. The number of call (buy) and put (sell) options contracts available on April 14 varies depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

Between $28,000 and $29,000: 2,600 calls vs. 1,800 puts. The net result is balanced between call and put options.
Between $29,000 and $30,000: 6,700 calls vs. 500 puts. The net result favors the call (buy) instruments by $110 million.
Between $30,000 and $30,500: 8,500 calls vs. 200 puts. Bulls increase their advantage to $250 million.
Between $30,500 and $31,500: 11,300 calls vs. 100 puts. Bulls’ advantage increases to $350 million.

This rough estimate considers only call options in bullish bets and put options in neutral-to-bearish trades. Nonetheless, this oversimplification excludes more complex investment strategies. A trader, for example, could have sold a put option, effectively gaining positive exposure to Bitcoin above a certain price, but this effect is difficult to estimate.

Bears are unlikely to reverse their situation

Bulls are expected to push Bitcoin above $30,500 on April 14 at 8:00 am UTC to profit an additional $100 million. Bears, on the other hand, would need to pressure Bitcoin’s price below $29,000 in order to balance the scales. However, bears recently suffered significant losses as BTC futures short contracts were forcibly liquidated to the tune of $128 million between April 9 and April 11.

As the most likely scenario favors Bitcoin bulls, their profits will most likely be used to reinforce the $30,000 support. Bears might consider licking their wounds and waiting for additional actions from regulators, as the macroeconomic scenario is currently bullish for supply-capped assets.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Paxos set to withdraw from Canada amid regulatory uncertainty

Paxos assured its customers that their funds would “remain safely” in their accounts but advised users to withdraw all balances at their earliest convenience.

Paxos, a fintech company that offers blockchain-based solutions for the global financial industry, has announced its decision to withdraw from the Canadian market.

The company released a statement informing customers that they will no longer be able to transact from their Paxos accounts starting from June 2, except for withdrawing their funds. The move comes as Paxos continues to assess “its readiness to re-enter the Canadian market in cooperation with the Ontario Securities Commission (OSC) at a future date.”

The announcement also stated that customers’ funds would “remain safely” in their accounts and will be reflected on their account balance, protected by Paxos’ terms and conditions. However, the company has urged customers to withdraw all balances from their accounts at their “earliest convenience.” Customers who don’t have any funds in their accounts will have their accounts automatically closed on May 9.

On the other hand, customers who maintain a balance in their Paxos account will still be able to access and withdraw their funds after June 2. However, they will not have full access to Paxos’ platform to initiate new trades. Paxos has advised customers to wire their fiat balances to bank accounts linked to their “itBit account” that is under their name or transfer digital assets held in their accounts to external wallets.

Paxos’ decision to exit the Canadian market comes at a time when Canada has been tightening its regulations on cryptocurrency platforms in recent months. On Feb. 22, the Canadian Securities Administrators (CSA) released a notice that mandates crypto exchanges to enter into new legally binding agreements as they wait for registration with the regulatory body. The updated undertaking includes a clause that forbids buying or depositing Value Referenced Crypto Assets, or stablecoins, via crypto contracts without written authorization from the CSA.

Paxos is not the only company to exit the Canadian market in recent months. On March 20, OKX informed Canadian users via email that because of “new regulations,” the cryptocurrency exchange “will no longer provide services or allow users to open new accounts in Canada starting on Mar. 24, 2023, 12:00 AM EST.”

On April 7, cryptocurrency derivatives exchange dYdX announced plans to end services in Canada, starting with halting the onboarding of new users located in the country. On April 14, the exchange will move all existing Canadian users to “close-only mode,” allowing them to only withdraw funds.

Price analysis 4/12: BTC, ETH, BNB, XRP, ADA, DOGE, MATIC, SOL, DOT, LTC

Today’s CPI report highlighted a slight decline in inflation, a development which could put a strong price floor beneath Bitcoin and select altcoins.

The March consumer price index climbed marginally by 0.1%, below economists’ expectation of a 0.2% increase and February’s advance of 0.4%. Although inflation is showing signs of slowing, the year-on-year CPI increased by 5%, well above the U.S. Federal Reserve’s 2% target.

The FedWatch Tool shows a 67% probability of a 25 basis point rate hike in the Fed’s May meeting, but by the end of the year, the majority of the market participants have come to expect rates to be lower than the current level.

*Daily cryptocurrency market performance. Source:* *Coin360*

An expansive monetary policy is usually positive for risky assets. In addition, crypto traders will focus on Bitcoin’s (BTC) halving, which is set to occur next year. That is also likely to be a positive for cryptocurrency prices. While the near-term picture is uncertain, the long term remains bullish.

Will traders book profits in the near term, pulling Bitcoin and altcoins lower, or will the rally extend further?

Let’s study the charts of the top-10 cryptocurrencies to find out.

Bitcoin price analysis

Bitcoin is witnessing resistance near $30,550, but a positive sign is that the bulls have not given up much ground. This suggests that the buyers are not rushing to the exit.

*BTC/USDT daily chart. Source: TradingView*

The bears are unlikely to give up without a fight. They will try to yank the price below the 20-day exponential moving average ($28,163), which remains the key support level to keep an eye on. If they are successful, the selling could pick up and the BTC/USDT pair may slump to the support at $25,250.

Conversely, if the price continues to move up from the current level or rebounds off the 20-day EMA, it will signal strong demand at lower levels. That will enhance the prospects of a rally to $32,400, which is likely to behave as a formidable resistance.

Ether price analysis

Ether (ETH) snapped back from the 20-day EMA ($1,831) on April 9, but the bulls could not push the price above the immediate resistance at $1,943.

*ETH/USDT daily chart. Source: TradingView*

If the price turns down from the current level and breaks below $1,824, the ETH/USDT pair will form a double top in the short term. That may tug the price down to the strong support at $1,680.

If bears want to keep the uptrend intact, they will have to protect the 20-day EMA and force the pair above the resistance at $1,943. If they can pull it off, the pair may resume its up-move. The $2,000 level may offer a resistance but it is likely to be crossed. The pair may then rally to $2,200.

BNB price analysis

BNB (BNB) surged above the $318 resistance on April 11, but the long wick on the candlestick shows that the bears are selling near $338.

*BNB/USDT daily chart. Source: TradingView*

The 20-day EMA ($315) is flattish and the RSI is turning down toward the center. This indicates a potential range-bound action in the near term. If the price slips below the 20-day EMA, the BNB/USDT pair may oscillate between $338 and the 200-day SMA ($292) for a few days.

Another possibility is that the price rebounds off the 20-day EMA with strength. That will suggest buying on dips. The bulls will then again try to kick the pair above the overhead zone between $338 and $346.

XRP price analysis

The long wick on XRP’s (XRP) April 11 candlestick shows that the bears are trying to stall the recovery at $0.53.

*XRP/USDT daily chart. Source: TradingView*

Sellers will try to strengthen their position by pulling the price below the 20-day EMA ($0.49). If they are successful, several short-term bulls may be forced to close their positions. The XRP/USDT pair may then slump toward the next support at $0.43.

Instead, if the price rebounds off the 20-day EMA, it will suggest that bulls continue to view the dips as a buying opportunity. The bulls will have to overcome the stiff resistance at $0.53 to regain the upper hand.

Cardano price analysis

Cardano (ADA) turned down from the neckline of the inverse head and shoulders (H&S) pattern, indicating that the bears are trying to halt the recovery at this level.

*ADA/USDT daily chart. Source: TradingView*

The 20-day EMA ($0.38) is an important level to watch out for on the downside. If the price bounces off this level, it will suggest that the sentiment remains positive and traders are buying on dips.

That will increase the likelihood of a break above the neckline. If that happens, the reversal pattern will complete. The ADA/USDT pair may then start a new uptrend toward $0.60.

Conversely, if the pair plummets below the 20-day EMA, it will suggest that the short-term traders are booking profits. That may sink the pair to the 200-day SMA ($0.35).

Dogecoin price analysis

Dogecoin’s (DOGE) rebound off the moving averages could not even reach the 38.2% Fibonacci retracement level of $0.09. This suggests that the bears are selling on every minor rise.

*DOGE/USDT daily chart. Source: TradingView*

The DOGE/USDT pair has slipped back to the moving averages, which shows that bears are trying to strengthen their position. If they yank the price below the moving averages, the pair may fall to the crucial support at $0.07.

On the other hand, if the price once again rebounds off the moving averages, it will suggest that the bulls are aggressively protecting the level. Buyers will then make one more attempt to push the price toward the $0.11 level.

Polygon price analysis

The bears are trying to sink Polygon (MATIC) below the support line of the symmetrical triangle pattern.

*MATIC/USDT daily chart. Source: TradingView*

If they succeed, it will suggest that the supply exceeds demand. The MATIC/USDT pair may then descend toward the 200-day SMA ($0.99), which is an important level to keep an eye on. If this level gives way, the pair may start a downtrend.

Contrarily, if the price turns up from the current level and breaks above the 20-day EMA ($1.11), it will suggest that the breakdown may have been a bear trap. The pair may then attempt to rise above the resistance line of the triangle.

Solana price analysis

After hesitating for several days, Solana (SOL) finally soared above the downtrend line on April 11. This is the first indication that the downtrend may be ending.

*SOL/USDT daily chart. Source: TradingView*

Usually, after breaking out of a significant resistance, the price turns down and retests the level. In this case, the price may dip down to the breakout level. If the price rebounds off the downtrend line, it will suggest that the bulls have flipped the level into support. That will enhance the prospects of a potential rally to $27.12 and thereafter to $39.

This positive view will invalidate if the price turns down and breaks below the downtrend line. Such a move will suggest that the breakout may have been a bull trap. The SOL/USDT pair may then tumble to $15.28.

Polkadot price analysis

Polkadot (DOT) turned down from the downtrend line on April 12, indicating that the bears are fiercely guarding this level.

*DOT/USDT daily chart. Source: TradingView*

If the price dips and sustains below the 20-day EMA ($6.24), the DOT/USDT pair may slump to the strong support at $5.70.

On the contrary, if the price turns up from the 20-day EMA, it will suggest that traders are buying the minor dips. The bulls will then again try to thrust the price above the downtrend line. If they manage to do that, the pair is likely to pick up momentum and soar toward the neckline of the H&S pattern.

Litecoin price analysis

Buyers pushed Litecoin (LTC) above the overhead resistance of $96 on April 11 but they could not sustain the higher levels, as seen from the long wick on the day’s candlestick.

*LTC/USDT daily chart. Source: TradingView*

The bears have used the opportunity to pull the price back to the 20-day EMA ($90). This is an important level to watch for because a break and close below it could sink the LTC/USDT pair to the support at $85. A bounce off this level may keep the pair stuck inside the $96-to-$85 range for a few days.

If bulls want to retain their edge, they will have to drive the price above $96. That will open the doors for a possible up-move to $106. On the other hand, a break below $85 could tug the pair to $75.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

When levees break, liquidity flows — Analyzing Ethereum Shapella and liquidity staking derivatives

Volumes from the top five Ethereum staking platforms suggest holders are hedging against the unknown until after ETH withdrawals are enabled.

The Ethereum network’s planned Shanghai hard fork is nearly here. Planned for April 12, this is the first major upgrade since the Merge in September 2022. The “Shapella” upgrade (a combination of the two major proposals, Shanghai and Capella), includes EIP-4895, which enables validators to withdraw staked ETH from the Beacon Chain (Consensus layer) to the EVM (execution layer). The execution layer is the fun and friendly Ethereum thausers have come to know and love.

Why is this a big deal? With just over 18 million ETH currently staked (valued at just over $33 billion at the time of writing), some of which has been locked up for years, the possibility of these tokens flooding an already teetering market is enough to get some holders ready to sell the news once withdrawals are enabled.

For holders who are both long and short ETH post-withdrawals, it’s likely to be a significant event, and on-chain activity suggests many feel the same: activity around liquid staking derivatives (LSDs) can be a useful gauge for what the market might do post-unlock.

Liquid Staking Derivatives could exert influence over Beacon Chain unlocks

What are liquid staking derivatives? They are a relatively new financial instrument born of DeFi that functions like bearer instruments for staked ETH. Similar to how borrowing and lending protocols give users a share token to represent locked collateral (think Aave’s a-tokens), staking ETH generates a wrapped asset used to claim the equivalent amount of Ethereum from the staking platform. When a staker deposits ETH with major platforms like Lido, Rocket Pool, Frax, Stakewise and now Coinbase, they receive a platform-specific flavor of LSD. Because staked tokens are illiquid, these wrapped assets allow stakers to continue earning rewards while securing the network without completely giving up the opportunity to participate in other activities within DeFi.

Liquid staking derivatives aim to solve these problems by allowing staked assets to be traded on secondary markets. This means that stakers could access the value of their staked ETH before the Shanghai upgrade enables withdrawals or, in the future, while maintaining their staked position. For example, a staker could use their wrapped ETH as collateral on another platform, or cover an unexpected expense by selling their LSD on a secondary market.

Rocket Pool, Lido, Coinbase and Frax

Though the markets have seen what seems to be an increasing string of green days, with Ethereum rapidly catching up to Bitcoin’s year-to-date performance, ETH’s gains are set against a backdrop of volatility among LSDs and staking tokens.

Lido’s LDO hasn’t recaptured its high from early March and has maintained a resistance at $2.75. The largest staking protocol by nearly an order of magnitude, Lido currently offers some of the highest staking rewards among major providers, with an average APY around 10%. The high rewards are no surprise: Lido took in nearly 50 million ETH in fees and 5 million in revenue in March, with April on track to meet or exceed those numbers.

*LDO versus ETH price. Source:* *TradingView*

Rocket Pool’s RPL fared much better, with a 25% increase over the last thirty days. The wrapped asset issued by the number three staking provider by TVL, rETH, has historically traded at a premium to ETH and other LSDs, likely a result of the provider’s reputation as the most decentralized staking solution available to holders today, making rETH a desirable LSD to hold.

Over the last thirty days, Rocket Pool has seen over $46 million in inflows, with many likely hoping to cash in on rETH’s premium when withdrawals are enabled. Rocket Pool’s average APY according to DeFiLlama is around 3.65%, which isn’t as high as other providers, but with over 1,800 active Rocket Pool nodes, the decentralized nature of the protocol is attractive. Addresses holding RPL have been steadily increasing as well.

Conversely, LSDs from the two top staking providers, Lido and Coinbase, both trade at a discount to spot ETH. Together representing nearly 90% of all staked ETH, it’s unsurprising that Lido and Coinbase have both come under scrutiny as centralizing entities given their concentration of staked ETH.

*Ethereum LSD providers share of staked ETH. Source:* *DeFiLlama*

Despite RPL’s impressive performance and StakeWise’s native token SWISE’s 15% gain, Frax seems to have come out as the winner.

Frax Ether has seen the most significant jump in total value locked over the last 30 days compared to the other top 10 staking providers at 14% growth for a $244 million valuation. Despite the increase in TVL, Frax totaled only $3.1 million in inflow over thirty days, putting the protocol just above StakeWise’s $2.6 million.

*Total value locked in Frax. Source:* *DeFiLlama*

Liquid staking derivatives like the wrapped Ether offered by staking providers is an important part of the Ethereum ecosystem much like plasma is an essential part of human blood. DeFi, NFT trading and GameFi are all interlinked, sometimes more subtly than others.

LSDs perform an important function of maintaining liquidity within the Ethereum ecosystem. Currently, over 15% of all Ether that exists is staked with a Beacon Chain validator (meaning this doesn’t include any ETH being used as collateral on borrowing/lending platforms).

Considering that a non-trivial amount of that ETH has been locked for years, through one of the toughest bear markets on top of that, indefinitely freezing this much capital (worth over $33 billion at the time of writing) would have a lasting and noticeable effect on the entire ecosystem.

Over the last 30 days though, trying to hedge against the chaos post-Shapella by holding unstaked ETH didn’t perform much better than holding an LSD: ETH is up 31% compared to stETH’s 30%, rETH’s 30%, while Coinbase’s cbETH is up 32% and Frax’s LSD is up 34%.

Overall, liquid staking derivatives are an important development in the staking ecosystem, as they help to address some of the challenges associated with staking, while also expanding the pool of potential participants in the ecosystem.

Withdrawals being enabled for staked Ethereum on the Beacon Chain means that proof-of-stake Ethereum has reached a point of sufficient stability and security, and the stakers who participated in securing the network will be able to retrieve their staked funds.

Regardless of the immediate impact of enabled withdrawals, proof-of-stake Ethereum’s continued success relies on incentivizing ETH holders to validate the network, and liquid staking derivatives have proven to be an effective mechanism to do so.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Ethereum price metrics hint that ETH might not sell-off after the Shapella hard fork

ETH traders are exercising caution ahead of the April 12 Shapella hard fork, but the signal to watch is staking unlock requests.

Ether (ETH) price has increased by 58% year to date, but it has far underperformed the market leader Bitcoin (BTC). In fact, the ETH/BTC price ratio has dropped to 0.063, its lowest level in nine months.

Analysts believe that the majority of the movement can be attributed to the Ethereum network’s upcoming Shapella hard fork, which is scheduled for April 12 at 10:27 p.m. UTC.

*Ether / Bitcoin price ratio at Binance. Source: TradingView*

The Ethereum network upgrade will allow stakers to unlock their Ether rewards or stop staking entirely. By April 11, over 170,000 ETH withdrawals were requested, according to the analytics firm Glassnode. However, the total staked on the Beacon Chain exceeds 18.1 million ETH, which has traders fearful until more information on ETH’s potential selling pressure becomes available.

Is the price impact of the Shapella fork already priced in?

The staking unlock was widely known and expected, so traders could have anticipated the movement. Some analysts have gone so far as to call the hard fork a “buy the news” event.

Literally everyone: “Ethereum Shanghai is a buy the news event because everyone thinks it is a sell the news event” pic.twitter.com/TpyL1TDnPj

— HORSE (@CanteringClark) April 9, 2023

Using a meme, trader CanteringClark is likely expressing dissatisfaction with the theory, but to invalidate the hypothesis, one must investigate potential reasons for ETH’s underperformance other than the much anticipated hard fork.

For starters, the Ethereum network’s average transaction fee has been above $5 for the past five weeks, and the Shapella fork does not address the issue, despite minor improvements. This alone lowers the chances of a bullish breakout following the upgrade, as most decentralized applications (DApps) and projects will continue to prefer second-layer and competing networks.

Furthermore, volume at Ethereum-based decentralized exchanges (DEX) has fallen by 84% since a weekly peak of $38.2 billion on March 5. The most recent data for the week ending April 2 was $6.4 billion, according to DefiLlama. In the same period, competing blockchains saw 60% lower volumes on average, a sign that Ethereum lost market share.

According to Paul Brody, EY’s global blockchain leader, one reason for Ether’s price underperformance relative to Bitcoin could be “the battle to keep Ethereum sufficiently and properly decentralized.” Brody cites exchanges as highly centralized custodial validators, as well as some semi-centralized players and staking pool operations that invest funds from tens of thousands of individual crypto wallets.

Ether derivatives display balanced bets between bulls and bears

Let’s examine Ether derivatives metrics to determine the current market position of professional traders. For example, the open interest in Ether options for the weekly expiry on April 14 is $510 million, with neutral-to-bullish call instruments outnumbering protective put options by 36%.

Those ETH options bulls could come up empty-handed because 60% of their bets were placed at $2,000 or higher. As a result, if Ether’s price remains between $1,800 and $1,900 on April 14 at 8:00 am UTC, the outcome is balanced between call and put options. Furthermore, an expiry price between $1,900 and $2,000 represents a mere $100 million advantage for bulls, which is unlikely to justify the cost of a price pump.

Futures markets should also be examined to determine whether the Shapella hard fork has caused investors to become more risk-averse. Ether quarterly futures are popular among whales and arbitrage desks, and they typically trade at a slight premium to spot markets, indicating that sellers are requesting more money to postpone settlement.

As a result, futures contracts in healthy markets should trade at a 5% to 10% annualized premium — a situation known as contango, which is not unique to crypto markets.

*Ether 3-month futures annualized premium. Source: Laevitas*

The premium on Ether futures is currently 2%, down from 4% the previous week. Despite being below the 5% neutral threshold, it shows no excessive short demand.

Traders should monitor staking unlock requests

Based on Ether derivatives, there is no reason to believe professional traders expect a significant price correction as a result of the staking unlock. Nonetheless, given the high transaction fees and declining DEX activity, the chances of a “buy the news” event are slim.

Professional traders would have used derivatives instruments to bet against Ether’s price because the event was widely publicized, which hasn’t happened given the ETH futures’ premium. There are no obvious reasons for a rally, but derivatives traders do not anticipate any panic selling. So, unless the number of staking unlock requests significantly increases, Ether should remain near $1,900 for the foreseeable future.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin continues to shine with 98% of inflows into crypto investment products

According to CoinShares, Bitcoin saw $56 million of inflows last week, which accounted for 98% of all investments into digital asset investment products.

On April 11, European cryptocurrency investment firm CoinShares published its latest “Digital Asset Fund Flows Report,” revealing that digital asset investment products experienced positive sentiment, with inflows totaling $57 million last week, bringing them back to a net positive position year-to-date. However, despite this, “volumes were low at $970 million for the week.” The global Bitcoin (BTC) exchange market also saw low volumes, ”just 25% of the year-to-date average at $18 billion for the week.”

*Weekly crypto asset flows in millions (U.S. dollars). Source: CoinShares*

According to the report, inflows were primarily driven by investors in the United States, with $27 million in inflows. Germany, Switzerland and Canada also saw positive sentiment, with inflows totaling $17 million, $13 million and $2.2 million, respectively, indicating a broad-based increase in confidence toward digital assets.

Investors primarily focused on Bitcoin, which received $56 million in inflows, accounting for 98% of all inflows. Meanwhile, short-Bitcoin suffered minor outflows totaling $0.6 million. In contrast, altcoins — including Uniswap’s UNI (UNI), Polkadot’s DOT (DOT) and Polygon’s MATIC (MATIC) — saw minor inflows of less than $1 million each.

The report also notes that, despite the Ethereum network’s Shapella upgrade scheduled for April 12, Ether (ETH) inflows were relatively minor at $600,000, suggesting that perhaps investors are cautious about investing in ETH until they are more confident about the impact of the upgrade. Additionally, blockchain equities saw minor inflows totaling $2.1 million, indicating a relatively quiet week for the market segment.

Overall, the positive sentiment in the digital asset market last week — despite low volumes — indicates that investors remain bullish on the prospects of cryptocurrency. As previously reported by Cointelegraph, Bitcoin has reclaimed $30,000, its highest price since June 2022. Over the last 30 days, BTC recorded gains of nearly 46%, rising to its highest level in 10 months on April 11.

*Bitcoin price chart. Source: CoinGecko*

On April 5, American business intelligence firm MicroStrategy added another 1,045 BTC to its growing crypto treasury, for approximately $29.3 million at an average price of $28,016 per BTC. Saylor has been a prominent Bitcoin proponent, urging businesses to incorporate the leading cryptocurrency into their strategic asset allocation. He has consistently emphasized his belief that Bitcoin is the most dependable, secure store of value available in the current market and presents a distinctive avenue for enterprises to safeguard their assets against inflation.

Bitcoin holds $30K, but some pro traders are skeptical about BTC price continuation

BTC traders are cautiously optimistic due to Bitcoin traditional assets, but there are still some macro headwinds to be aware of.

Bitcoin (BTC) price has finally broken the $30,000 level after the key price zone lasted as a ten months resistance level. BTC price rallied 6.5% on April 10 and the much-awaited price gain ended an agonizing 12-day period of extremely low volatility, which saw the price hovering close to $28,200. Bulls are now confident that the bear market has officially ended, especially considering the fact that BTC price has gained 82% year-to-date.

Another interesting note is that Bitcoin’s decoupling from traditional markets has been confirmed after the S&P 500 index presented a mere 0.1% gain on April 10, and West Texas Intermediate (WTI) oil traded down 1.2%. Bitcoin traders are likely anticipating the Federal Reserve’s interest rate policy to reverse sooner than later.

Stagflation risk could be behind the decoupling

Higher interest rates make fixed-income investments more attractive, while businesses and families face additional costs to refinance their debts. The reversal of the U.S. central bank’s recent tightening movement is deemed bullish for risk assets. However, the fear of stagflation — a period of increased inflation and negative economic growth — would be the worst-case scenario for the stock market.

Fixed-income traders are betting that the Federal Reserve probably has one more interest-rate hike because the latest economic data displayed moderate resilience. For instance, the 3.5% U.S. unemployment rate announced on April 7 is the lowest measure in half a century.

The U.S. treasuries market suggests a 76% chance that the Federal Reserve will bolster the benchmark by 0.25% on April 29, according to Bloomberg. There’s also the added uncertainty of the banking crisis’s impact on the sector, with JPMorgan Chase, Wells Fargo and Citigroup scheduled to report first-quarter results on Friday.

Bitcoin’s rally above $30,000 could be the first evidence of a shift in investors’ perception from a risk market proxy to a scarce digital asset that might benefit from a period of inflation pressure and weak economic growth.

Two critical factors will determine whether the rally is sustainable: the high leverage usage increasing the odds of forced liquidations during normal price fluctuations, and whether or not pro traders are pricing higher odds of a market downturn using options instruments.

Bitcoin futures show modest improvement

Bitcoin quarterly futures are popular among whales and arbitrage desks. However, these fixed-month contracts typically trade at a slight premium to spot markets, indicating that sellers are asking for more money to delay settlement.

As a result, futures contracts in healthy markets should trade at a 5-to-10% annualized premium — a situation known as contango, which is not unique to crypto markets.

*Bitcoin 2-month futures annualized premium. Source: Laevitas.ch*

Bitcoin traders have been cautious in the past few weeks, and even with the recent breakout above $30,000, there has been no surge in demand for leverage longs. However, the Bitcoin futures premium has slightly improved from its recent low of 3% on April 8 to its current level of 4.2%. This suggests that buyers are not using excessive leverage and there is effective demand on regular spot markets, which is healthy for the market.

Bitcoin option traders remain neutral

Traders should also analyze options markets to understand whether the recent correction has caused investors to become more optimistic. The 25% delta skew is a telling sign when arbitrage desks and market makers overcharge for upside or downside protection.

In short, if traders anticipate a Bitcoin price drop, the skew metric will rise above 7%, and phases of excitement tend to have a negative 7% skew.

*Bitcoin 60-day options 25% delta skew: Source: Laevitas.ch*

Currently, the options delta 25% skew has shifted from a balanced demand between call and put options on April 9 to a modest 4% discount for protective puts on April 10. While this indicates a slight increase in confidence, it is not enough to break the 7% threshold for moderate bullishness.

In essence, Bitcoin options and futures markets suggest that pro traders are slightly more confident, but not excessively optimistic. The initial decoupling from traditional markets is promising because investors are showing confidence that crypto markets will benefit from higher inflationary pressure and it highlights traders’ belief the Fed can no longer continue raising interest rates.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Price analysis 4/10: SPX, DXY, BTC, ETH, BNB, XRP, ADA, MATIC, DOGE, SOL

After days of consolidation near the local high, Bitcoin is trying to breakout and challenge the $30,000 level.

Bitcoin’s (BTC) tight consolidation near its local top suggests that traders are waiting for a catalyst to start the next trending move. The Consumer Price Index data on April 12 and the producer price index data on April 13 could give insight into the Federal Reserve’s future rate hikes and shake the traders out of their slumber.

The dull price action in Bitcoin has not reduced the interest in it. According to Ahrefs search volume data, Bitcoin remains the most Googled term in the United States, followed by the keywords “Donald Trump” and “breaking news.”

Another point worth noting is that Bitcoin’s circulating supply continues to dwindle. Citing Glassnode data, investor Anthony Pompliano pointed out that 53% of Bitcoin’s circulating supply has not moved in the past two years.

If demand increases, there could be a shortage of supply, which could boost prices higher. What are the critical resistance levels to watch for in Bitcoin and altcoins in the near term?

Let’s study the charts to find out.

S&P 500 index price analysis

The S&P 500 index (SPX) turned up after a two-day correction on April 6, indicating that the sentiment remains positive and traders are buying on minor dips.

The upsloping 20-day exponential moving average (EMA) (4,035) and the relative strength index (RSI) in the positive territory increase the likelihood of a rally to 4,200. Although this level has behaved as a formidable barrier in the past, it is likely to be scaled during the third attempt. If that happens, the index may challenge the 4,300 resistance. This level may witness aggressive selling by the bears.

The first important support to watch on the downside is the 20-day EMA. If this support cracks, the index could retest the vital support at the 200-day simple moving average (SMA) ($3,944).

U.S. Dollar Index price analysis

The U.S. Dollar Index continues to trade below the 20-day EMA (102.73), indicating that the short-term trend remains bearish. Sellers are likely to defend the 20-day EMA during the current relief rally.

If the price turns down from the 20-day EMA, the index may drop to the vital support of 100.82. The bulls are expected to guard this level with all their might because a break below it will complete a head-and-shoulders (H&S) pattern. The index may then start the next leg of the downtrend.

Another possibility is that the price rebounds off the 100.82 support and rises above the 20-day EMA. If that happens, it will suggest that the index may oscillate between 100.82 and the 200-day SMA (106.47) for some more time.

Bitcoin price analysis

Bitcoin bounced off the 20-day EMA ($27,692) on April 9, indicating buying at lower levels. The gradually upsloping 20-day EMA and the RSI in the positive territory indicate advantage to the buyers.

The $29,200 is the key level to watch for on the upside. If bulls pierce this resistance, the BTC/USDT pair may climb to $30,000. The bears will try to stall the rally at this level, but the likelihood of a break above it is high. The pair may then soar to $32,200.

Contrarily, if the price once again turns down from $29,200, it will suggest that bears are active at higher levels. The sellers will then make one more attempt to sink the price below the 20-day EMA. If they succeed, the pair may slump to $25,250.

Ether price analysis

Buyers successfully defended the 20-day EMA ($1,813) on April 9, indicating that the trend remains positive in Ether (ETH).

The bulls will try to overcome the barrier at $1,943 and catapult the price to $2,200. Sellers are likely to fiercely defend the zone between $2,000 and $2,200. If the price turns down from this zone but does not break below the 20-day EMA, it will signal that the rally may extend further.

This positive view will invalidate in the near term if the price turns down and plummets below the 20-day EMA. The ETH/USDT pair could then descend to the strong support zone of $1,743 to $1,680.

BNB price analysis

BNB (BNB) has been trading below the 20-day EMA ($313) for the past few days, but the bulls have not allowed the price to slide below the immediate support at $306. This suggests that the selling pressure dries up at lower levels.

The bulls will take advantage of the situation and try to drive the price above the overhead resistance of $318. If they do that, the BNB/USDT pair could pick up momentum and soar to $338 and later to $346.

On the contrary, if the price turns down from the current level, it will suggest that the bears are selling on every minor relief rally. If the $306 level gives way, the pair may slip to the 200-day SMA ($292).

XRP price analysis

XRP (XRP) has been trading above the 38.2% Fibonacci retracement level of $0.49 for the past few days, indicating that buyers are not waiting for a deeper correction to buy.

The bulls will try to strengthen their position by pushing the price to the overhead zone between $0.56 and $0.58. This remains the key zone to keep an eye on because a break above it could open the doors for a potential rally to $0.65 and thereafter to $0.80.

Instead, if the price turns down and breaks below the 20-day EMA ($0.48), it will suggest that short-term traders may be booking profits. That could tug the XRP/USDT pair to the important support at $0.43.

Cardano price analysis

Cardano’s ADA (ADA) has been trading above the 20-day EMA ($0.37) for the past few days, but the bulls are struggling to clear the neckline of the inverse H&S pattern. This suggests that the bears are defending the level with vigor.

Usually, a tight consolidation is followed by a sharp breakout. The rising 20-day EMA and the RSI in the positive area suggest that the breakout may happen to the upside. A close above the neckline will complete the reversal setup and signal the start of a new uptrend toward the target objective of $0.60.

This bullish view will be negated if the price turns down and breaks below the 20-day EMA. The ADA/USDT pair may then tumble to the 200-day SMA ($0.35). This level is likely to attract strong buying by the bulls.

Polygon price analysis

Sellers tried to sink Polygon’s MATIC (MATIC) below the support line on April 9 and 10, but the bulls held their ground. This suggests buying at lower levels.

The bulls will try to push the price above the 20-day EMA ($1.11). If they are successful, the MATIC/USDT pair could surge to the resistance line of the symmetrical triangle. A break and close above the triangle will suggest that the bulls have overpowered the bears. That will clear the path for a possible rally to $1.30.

Instead, if the price turns down from the 20-day EMA and plunges below the support line, it will indicate that bears are in control. The pair may then retest the vital support at the 200-day SMA ($0.99).

Dogecoin price analysis

Dogecoin (DOGE) successfully held the moving averages on April 8, but the shallow bounce on April 9 suggests that demand dries up at higher levels.

Both moving averages have flattened out, and the RSI is just above the midpoint, indicating a balance between supply and demand. The bounce off the current level could face selling at the 38.2% Fibonacci retracement level of $0.09. If the price turns down from this level, the DOGE/USDT pair may oscillate between $0.09 and the moving averages for some time.

A break below the moving averages could sink the pair to the strong support of $0.07, while a rise above $0.09 will increase the likelihood of a rally to $0.11.

Solana price analysis

The trading range in Solana’s SOL (SOL) has narrowed down further, indicating uncertainty among the bulls and the bears.

The flattish 20-day EMA ($20.64) and the RSI just below the midpoint do not give a clear advantage either to the bulls or the bears. Hence, it is better to wait for a breakout to happen before waging large bets.

If the price turns up and pierces the downtrend line, it may attract strong buying by the bulls. The SOL/USDT pair could then start a rally to $27 and subsequently to $39. On the other hand, the selling could intensify if the price collapses below $18.70. The pair may then nosedive to $15.28.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin price sets up for an explosive move as ADA, XLM, AAVE and CFX turn bullish

BTC’s tight trading range hints at an eventual breakout, and ADA, XLM, AAVE and CFX could follow.

The long weekend has not produced any fireworks in Bitcoin (BTC) price, which continues to trade inside an ever-narrowing range. Bitcoin is on track to form a third consecutive Doji candlestick pattern on the weekly chart. This suggests that the Bitcoin bulls and the bears are not clear about the next directional move.

It is not only Bitcoin that is stuck inside a range. On April 7, Jurrien Timmer, director of global macro at asset manager Fidelity Investments, tweeted that the S&P 500 Index had been stuck inside a range for the past nine months and a breakout was due “sooner or later.”

*Crypto market data daily view. Source:* *Coin360*

Bitcoin’s failure to break above the $30,000 level has attracted profit-booking in several altcoins but a few have witnessed shallow pullbacks. This indicates that traders are holding on to their positions expecting a move higher.

Let’s study the charts of select altcoins that may turn up and start an uptrend if Bitcoin breaks out to the upside. What are the resistance levels above which these five cryptocurrencies turn bullish?

Bitcoin price analysis

Bitcoin has been trading inside a tight range for the past two days, indicating indecision among the bulls and the bears. Usually, tight ranges are followed by an expansion in volatility.

The 20-day exponential moving average ($27,500) is flattening out and the relative strength index (RSI) has gradually been slipping toward the center. This suggests a balance between supply and demand.

If the price tumbles below the 20-day EMA, several short-term stop losses may be triggered and the BTC/USDT pair may dive to the breakout level of $25,250.

Conversely, if the price rebounds off the 20-day EMA with strength, it will suggest that the sentiment remains positive and traders are buying the dips. A rally above $29,200 could enhance the prospects of a rally to $30,000 and subsequently to $32,500.

*BTC/USDT 4-hour chart. Source: TradingView*

The 20-EMA is flattening out on the four-hour chart and the RSI is just below the midpoint. This does not give a clear advantage either to the bulls or the bears. This uncertainty is unlikely to continue for long, and a directional move could soon start. However, it is difficult to predict the direction of the breakout.

Therefore, it is better to wait for the breakout to happen before establishing directional bets. The important level to watch on the upside is $29,200 and on the downside is $26,500. A breach of either level could start a short-term trending move.

Cardano price analysis

The bulls are not allowing Cardano (ADA) to dip below the 20-day EMA ($0.37), indicating demand at lower levels.

The upsloping 20-day EMA and the RSI in the positive area suggest that the path of least resistance is to the upside. The ADA/USDT pair could first rise to the neckline of the inverse head-and-shoulders pattern. A break and close above this resistance will signal a potential trend change. The pair could then rally toward the pattern target of $0.60.

If bears want to prevent the up-move, they will have to quickly yank the price back below the 20-day EMA. The pair may then drop to the 200-day simple moving average ($0.35) and later to $0.30.

*ADA/USDT 4-hour chart. Source: TradingView*

The four-hour chart shows that the bulls have pushed the price above the 20-EMA and will next try to overcome the barrier at the downtrend line. If they do that, it will suggest that the pullback may be over. The pair may then climb to the neckline where the bears are expected to mount a strong defense.

Contrarily, if the price faces rejection at the downtrend line, it will suggest that bears are active at higher levels. The selling could accelerate below $0.37 and the pair may plunge to the 200-SMA.

Stellar price analysis

Stellar (XLM) turned down from the overhead resistance of $0.12 and the price is nearing the 20-day EMA ($0.10). The bulls are likely to buy the dips to the 20-day EMA.

*XLM/USDT daily chart. Source: TradingView*

If the price rebounds off the 20-day EMA, the bulls will again try to clear the overhead hurdle. If they succeed, the XLM/USDT pair will complete a bullish rounding bottom pattern. That could signal the start of a new up-move. The pair may first rally to $0.15 and thereafter march toward the pattern target of $0.17.

Contrary to this assumption, if the price turns down and breaks below the 20-day EMA, it will suggest that bulls are losing their grip. The pair may then drop to the 200-day SMA ($0.09). This is a make-or-break level for the bulls because if it cracks, the pair may plummet to $0.07.

*XLM/USDT 4-hour chart. Source: TradingView*

The four-hour chart shows that the pair is correcting inside a falling wedge pattern. The price has bounced off the support line and the bulls will next attempt to propel the pair above the wedge. If they manage to do that, the pair could rally to $0.11 and subsequently to $0.12.

On the other hand, if the price turns down and plummets below the support line, it will suggest that the selling has intensified. There is a small support at $0.10 but if that cracks, the decline could extend to the 200-SMA.

Aave price analysis

Aave (AAVE) has turned down from the overhead resistance of $82, indicating that the bears are fiercely protecting this level. They have pulled the price below the immediate support at the 20-day EMA ($75).

*AAVE/USDT daily chart. Source: TradingView*

The AAVE/USDT pair could next slip to the 200-day SMA ($73), which is close to the uptrend line. Buyers are likely to defend this level with vigor. If the price rebounds off the uptrend line and breaks above the 20-day EMA, the pair could reach $82.

If bulls overcome this barrier, the pair will complete an ascending triangle pattern. This setup has a target objective of $100. This bullish view will invalidate if the price continues lower and breaks below the uptrend line. The pair may then slide to $68 and later to $64.

*AAVE/USDT 4-hour chart. Source: TradingView*

The bears have pulled the price to the 200-SMA on the four-hour chart. The 20-EMA has started to turn down and the RSI is in the negative territory, indicating that bears have the upper hand.

If the 200-SMA gives way, the pair could decline further to the uptrend line. This is an important level for the bulls to defend because a break below it will further strengthen the bears.

On the upside, a break above the 20-EMA will be the first sign that the bulls are making a comeback. The pair may then rise to the overhead resistance at $82.

CFX price analysis

Conflux (CFX) has been in a corrective phase for the past few days but a minor positive is that the bulls are trying to defend the 20-day EMA ($0.36).

*CFX/USDT daily chart. Source: TradingView*

If the price rebounds off the current level, the CFX/USDT pair could reach the downtrend line. This is an important level for the bears to guard because a break above it could open the doors for a possible rally to $0.44 and then $0.49.

Conversely, if the price plunges and sustains below the 20-day EMA, it will suggest that the bulls may be rushing to the exit. That could attract further selling, pulling the price toward the next support at $0.30. The bulls are expected to buy the dips to this level.

*CFX/USDT 4-hour chart. Source: TradingView*

The four-hour chart shows that the bears are trying to keep the price below the 20-EMA. That could pull the pair to the 200-SMA, which is likely to act as a major support.

If the price rebounds off this level, the bulls will again try to drive the price to the downtrend line. This is the key level to keep an eye on because a break above it will signal that bulls are back in the game.

On the downside, a break and close below the $0.30 support could attract further selling, sinking the price to $0.25.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin derivatives favor further BTC price rally toward $30K

Bitcoin’s price might have held near $28,000, but the absence of shorts using margin and futures markers is a bullish indicator.

Despite regulatory pressure and worsening macroeconomic conditions, Bitcoin (BTC) demonstrated bullishness, holding near $28,000 for the past week. Furthermore, professional traders have maintained leveraged long positions on margin and in futures markets, indicating strength.

On the regulatory front, on April 4, the Texas Senate Committee on Business and Commerce agreed to move forward and remove incentives for miners operating within the state’s regulatory environment. If passed, Senate Bill 1751 would cap compensation for load reductions on Texas’ power grid during emergencies.

Risk of recession grows against rate hikes

The risk of a recession in the United States grew after applications for unemployment benefits in the week ending March 25 were revised to 246,000, up 48,000 from the initial report.

Furthermore, Kristalina Georgieva, managing director of the International Monetary Fund (IMF), stated on April 6 that the economies of the U.S. and Europe should continue to struggle as higher interest rates weigh on demand.

Regarding the banking crisis, Georgieva advised central banks to keep raising interest rates, adding, “Concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks — now is not the time for complacency.“

On the other hand, on April 6, St. Louis Federal Reserve president James Bullard downplayed concerns about the impact of financial stress on the economy. Bullard stated that the Fed’s reaction to the banking sector’s weakness was “swift and appropriate,” and that “monetary policy can continue to put downward pressure on inflation.“

Let’s look at derivatives’ metrics to better understand how professional traders are positioned in the current market conditions.

BTC price derivatives reflect traders’ neutral sentiment

Margin markets provide insight into how professional traders are positioned because they allow investors to borrow cryptocurrency to leverage their positions.

For example, one can increase exposure by borrowing stablecoins and buying Bitcoin. On the other hand, borrowers of Bitcoin can only take short bets against BTC/USD.

*OKX stablecoin/BTC margin lending ratio. Source: OKX*

The chart above shows that OKX traders’ margin lending ratio has remained near 28x in favor of BTC longs over the last week. If those whales and market makers had perceived increased risks of a price correction, they would have borrowed Bitcoin for shorting, causing the indicator to fall below 20x.

The top traders’ long-to-short net ratio excludes externalities that might have solely impacted the margin markets. Analysts can better understand whether professional traders are leaning bullish or bearish by aggregating the positions on the spot, perpetual and quarterly futures contracts.

Because there are some methodological differences between different exchanges, viewers should focus on changes rather than absolute figures.

*Exchange’s top traders’ long-to-short ratio. Source: Coinglass*

Between April 1 and April 7, the top traders’ long-to-short ratio at Binance slightly declined from 1.17 to 1.09. Meanwhile, at the Huobi exchange, the top traders’ long-to-short ratio has stood near 1.0 since March 18. More precisely, the ratio slid from 1.00 on April 1 to 0.95 on April 7, thus relatively balanced between longs and shorts.

Lastly, OKX whales presented a very different pattern as the indicator declined from 1.25 on April 3 to a 0.69 low on April 5, heavily favoring net shorts. Those traders reverted the trend, aggressively buying Bitcoin using leverage for the past two days as the long-to-short ratio returned to 0.97.

Absence of Bitcoin shorts is a bullish indicator

In essence, both the Bitcoin margin and futures markets are currently neutral, which should be interpreted positively given that the Bitcoin price rose 41.5% between March 10 and March 20, holding the $28,000 level.

Given the enormous regulatory uncertainty caused by the SEC’s Wells notice against Coinbase on March 22, the absence of shorts using margin and futures markets currently favors further price appreciation.

Unless the economic crisis unfolds faster than expected, inflation will remain a top concern for investors, and Bitcoin inflows should be enough to keep $28,000 as a resistance level.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.