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Ethereum long-term Price Analysis: 30 November

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Disclaimer: The findings of the following article are the sole opinion of the writer and should not be considered as investment advice

Both the 30-day and 60-day correlations of Bitcoin with Ethereum have dropped since May 2020 from 0.95 to 0.51. While this is news to rejoice over, especially for ETH enthusiasts, it may just be a development fueled by the DeFi summer.

The YTD returns of ETH [260%] are more than double that of BTC [121%], a finding that also explains the drop in correlation mentioned above. The king of altcoins has decoupled enough from the king of crypto, but will it last? This will be an interesting development to keep an eye out for as the year comes to an end.

As for ETH’s price, it looked bearish at press time. However, should the bull run continue, the price will disregard this bearish indication and surge higher on the charts.

Ethereum 1-week chart

Source: ETHUSD on TradingView

The one-week chart for ETH is an important one, with important trends for both the higher timeframe and the lower timeframe able to be identified. The chart attached herein highlighted two important levels; regardless of bullish or bearish, these levels are important and will play an important role soon.

Rationale

The chart pictured two Fibonacci extensions, 1 extending from the ATH to the ATL [all-time low], the other a trend-based Fibonacci extension that would extend from the ATH to ATL and then towards the latest top at $623.22. Here’s why this is helpful,

  1. By factoring the recent top, we can identify where the price might go, be it bullish or bearish
  2. The intersection of both these Fibonacci tools was a range extending from $397 to $309
  3. The overall pattern being formed [ascending channel] on a daily/weekly time frame also underlined a bearish scenario for ETH
  4. Adding this to the already bearish scenario for Bitcoin further helps us understand that we are bound to see a pullback before the bull run actually begins
  5. Another important level to keep an eye out for is the wick formed on 31 August – $489.

Conclusion

The one-week chart and the one-day chart both highlighted a bearish pattern [ascending channel], and multiple indicators pointed to a drop coming soon. These support ranges will be important when the price pulls back on the charts.

Source: https://eng.ambcrypto.com/ethereum-long-term-price-analysis-30-november/

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US SEC charges crypto trader ‘Coin Signals’ in $5 million fraud case

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United States Securities and Exchange Commission (SEC) charged a cryptocurrency trader for allegedly being involved in a ponzi scheme defrauding more than $5 million from over 170 investors. The accused, Jeremy Spence, who goes by the name “Coin Signals,” was charged in Manhattan Federal Court for “soliciting funds” for various crypto funds that he operated. 

Federal authorities claimed that Spence operated a Ponzi scheme and that his offenses include “commodities fraud and wire fraud.” According to SEC, investors transferred Bitcoin and Ethereum to Spence, so that he could invest the assets on their behalf.  

Federal Bureau of Investigations (FBI) Assistant Director-in-Charge William Sweeney Jr claimed that Spence enticed investors by giving them false information about the “success of his investment platform.” The trader allegedly used money from new investors to pay off others in order “to keep his plan moving” which the FBI Director said was “a  typical marker of a Ponzi scheme.”

The official complaint read:

Spence solicited investments for several Funds, the largest and most active of which were the Coin Signals Bitmex Fund, a/k/a the “CS Mex Fund,” the Coin Signals Alternative Fund, a/k/a the “CS Alt Fund,” and the Coin Signals Long Term Fund. 

Manhattan US Attorney Audrey Strauss alleged that Jeremy Spence lured investors to his crypto “investment scam” by promising returns of up to 148%.  The Attorney further said:  

Spence’s investments not only failed to reach his audacious claims, they consistently lost money, leaving a $5 million void in his clients’ crypto accounts.

According to the Commission, Spence was arrested this morning in Rhode Island. He could face nearly 30 years in prison if authorities convict him on all charges. 

Source: https://ambcrypto.com/us-sec-charges-crypto-trader-coin-signals-in-5-million-fraud-case/

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Bitcoin has become a good long-term investment: Former WH Communications Director

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Anthony Scaramucci, former White House Communications Director, and founder of SkyBridge hedge fund made bullish statements about Bitcoin and called it “a good long-term investment.”

While predicting upcoming volatility and correction, Scaramucci believed the digital asset would only increase in price.

Alongside SkyBridge Partner and the Chief Operating Officer, Brett Messing, Scaramucci claimed that the asset declined in risk and was as safe as owning bonds and gold. The duo argued: 

Increased regulations, improved infrastructure and access to financial institutions — like Fidelity — that hold investors’ money have made bitcoin investments as safe as owning bonds and commodities like gold, which are also used to balance portfolios.

In short, bitcoin has matured — though it’s still in an early adoption phase — and now offers significant long-term value.

Recently, former senior chairman of Goldman Sachs, Lloyd Blankfein shared his opinion on how government regulations could get in Bitcoin’s way. The investment banker thinks that in such an event, perhaps investors could comply with new rules, but it would cost them their privacy, a key property that attracts investors to Bitcoin, in the first place. 

However, according to Scaramucci the value of the digital asset had strengthened because of increased regulation and scrutiny. In his latest opinion piece, Scaramucci said Bitcoin was a viable hedge against inflation for long-term investors.

Additionally, the exec believed that Bitcoin’s market capitalization was the strongest indicator of its value:

If we were to look at that through the prism of the S&P 500, it would make bitcoin a top 10 company in the world, having gone from zero to half a trillion in just 12 years. Only a few companies, like Facebook and Tesla, have grown that fast.

A month ago, Anthony Scaramucci planned to launch a new Bitcoin fund – named SkyBridge Bitcoin Fund L.P, which could seek “exposure to digital assets.”

Source: https://ambcrypto.com/bitcoin-has-become-a-good-long-term-investment-former-white-house-communications-director/

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The GBTC story – How Grayscale determines Bitcoin’s price, future

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Grayscale’s dropping BTC premium is sounding alarm bells for investors and traders alike. Alarm bells isn’t an understatement, especially since the premium plummeted to 2% from about 30% back in December 2020. What does this mean? Well, the premium may have been the only motivation for institutions to invest in GBTC, and not Bitcoin.

This irrational motivation and market were explored by Peter Schiff during a recent talk. Drawing a parallel between Bitcoin and Gamestop, Schiff highlighted the red flags in Michael Saylor’s argument for buying Bitcoin using cash from the balance sheet of institutions. Saylor had underlined this move as a hedge against inflation. According to Schiff, however, if you buy Bitcoin under the flawed line of reasoning that its price will go up in the future, relying on future buyers to generate demand and buying is just as good as buying Gamestop. 

Source: YCharts

This fuels the question – What makes Bitcoin different this time around, and why buy now and not before?

The argument is that Bitcoin’s price rally is centered on institutional buying and the digital gold narrative. The key here is that institutional buying is an investment in GBTC, and institutions are buying GBTC for a premium. Once the premium drops, the demand is expected to drop, and the same is what has happened.

What does this entail? Well, the drop in demand suggests that there may be a pause, or worse, a stop in institutional buying of GBTC, and this also highlights the possibility of the siphoning off of Bitcoin demand. As expected, this may lead to a drop in price. The price drop will be followed by a further drop in demand, and the direction of investment flows would change to accommodate the next best opportunity – If not a premium, then a discount. 

Just as institutions lined up for Grayscale’s premium (That was the equivalent of free money to most as the profits from the appreciation in Bitcoin’s price were passed on to them), they may line up for discounts. Seeing that Grayscale has been the largest buyer, pooling institutional investor resources in GBTC, a drop in demand from Grayscale may be the final nail in the coffin for Bitcoin’s demand.

The price hasn’t experienced a free fall as of now, but it wouldn’t be wrong to say that there is a probability that there may be one in the future. A drop in premium may lead to a point where GBTC is discounted, and this could be the turning point for Bitcoin. The leftover demand may move towards GBTC, siphoning off further demand and the price of Bitcoin.

Simply put, GBTC that fed Bitcoin with demand and a price rally for all of retail and institutions, may turn against it, and with the changing tide, it might take demand and investment flows away from Bitcoin. Does this mean that GBTC will replace BTC altogether? That’s a tricky question to answer, but for institutions, Bitcoin may become synonymous with GBTC, instead of the other way round. 

Such a hypothesis posits an uncertain future for Bitcoin’s price and for institutions and retail traders buying Bitcoin at the press time price level. However, this may only be the beginning. If GBTC premiums drop further, a different story may unravel.

Source: https://ambcrypto.com/the-gbtc-story-how-grayscale-determines-bitcoins-price-future/

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Polkadot Price Analysis: 26 January

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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

Polkadot has been one of the market’s top performers in 2021, with the cryptocurrency’s price action speaking for itself. In fact, since 28 December, the crypto-asset has risen by a whopping 300%, a figure that highlights its tremendous rise on the charts.

After avoiding corrections for a week, the asset seemed ready for a period of drawdowns. However, the crypto’s market structure was flashing ambivalent signals at press time, with DOT registering a market cap of $14.97 billion while ranked 4th on CoinMarketCap’s charts.

Polkadot 4-hour chart

Source: DOT/USD on Trading View

In the 24 hours before press time, Polkadot suffered a slump on the charts, with the asset dropping down to $16.42. However, the long-term chart highlighted the presence of an ascending triangle, one which predominantly kept bullish expectations alive. Further, the Market Structure dictated that the possibility of the price moving in the direction of the green line was true. It should be noted though that there have been cases of fakeouts in the past.

If Polkadot’s period of correction takes place over the next couple of weeks, the possibility of the asset consolidating down to $14.50 is widely probable. One of the major reasons for the same would be market exhaustion and the current bearish divergence forming with respect to DOT’s rise over the last 2 weeks.

Market Rationale

Source: DOT/USD on Trading View

According to the Stochastic RSI, the crypto-asset may register an immediate pullback. However, historical movements suggest that DOT has the tendency to remain near the oversold region, whenever the price has dragged down the indicator.

The Relative Strength Index or RSI was exhibiting the rise of selling pressure as the indicator was starting to drop on the charts.

Finally, the Awesome Oscillator or AO was pointing to an immediate trend reversal, with the bears rising in momentum.

Conclusion

The correction period has been inevitable for Polkadot since the start of 2021 and it may manifest in the charts over the next few weeks. The immediate support at $14.50 should act as a bouncing board, before estimating a new bottom or top.

Source: https://ambcrypto.com/polkadot-price-analysis-26-january/

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