Binance Coin has seen another price increase, which totals around 8% over the past 24 hours of trading (as of now), BNB had even managed to reach $29.83 early today, creating a new all-time high, before the bullish pressure started to fade away.
After an extraordinary price explosion totaling 230% over the past 90 days, Binance Coin remains in the 7th place amongst the top cryptocurrency projects by market cap as it currently holds a $4.11 billion market cap.
Looking at the BNB/USD 1-Day Chart:
Against the US Dollar, we can see that since our previous BNB/USD analysis, Binance Coin has continued to gain momentum above the $21 support level and increased to where it is currently trades, around $29.
From above: The nearest level of resistance now lies at the $30 psychological resistance level. Above $30, we can expect further resistance at $31.30 and $34.31, which is provided by the medium term 1.272 and 1.414 Fibonacci Extension levels. If the buyers continue above $35, we can expect further resistance at $36.
From below: The nearest level of support now lies at $28 and $26. Further support lies at $25.18, $24.16, $22.67 and $21.69.
The trading volume has managed to remain consistently high during May 2019 as the buyers continue their bullish momentum.
The Stochastic RSI has now reached overbought conditions which could suggest that a pullback may take place over the next few days to give the buyers a little break. This is further confirmed by the RSI as it trades in the overbought territory.
Looking at the BNB/BTC 1-Day Chart:
Against Bitcoin, we can see that BNB/BTC continued to rebound from the support of 0.00277 BTC which was provided by the 200-days EMA. BNB has now rebounded higher up to the significant resistance at the 0.004 BTC level (highest level so far today).
From above: The nearest levels of resistance lie at 0.0038 BTC and 0.0040 BTC. Higher resistance at 0.004398 BTC, 0.004613 BTC and 0.0048 BTC (BTC all time high).
From below: The nearest level of support now lies at 0.0035562 BTC. Beneath this, more support lies at 0.003420 BTC, 0.003188 BTC and 0.003 BTC.
The trading volume for BNB/BTC has also increased during May 2019.
The Stochastic RSI has now also reached overbought territory which could suggest that a retracement might take place soon, before the coin continues further higher.
Many individuals in the cryptocurrency trading and investing space often utilize technical analysis (TA) in one form or another. But does technical analysis (TA) truely work in crypto?
Technical analysis (TA) can be used for a multitude of applications. An investor might simply use TA to check price’s location relative to its history, while more in-depth traders might look to the charts to develop trading systems, for example.
Questioning whether or not TA works in crypto, on the whole, is a difficult one to answer. Trading and investing, via TA, significantly depends on who is applying it, as well as their goals. What might work for one person, may not work for the next due to individual biases, interpretations, tendencies, targets, etc.
TA – For Determining Probabilities
Distinguishing TA from trading, Crypto Nerd on Reddit said:
“Technical analysis is about determining probabilities. Trading is about implementing that analysis within a wider, more dynamic set of rules (trading plan) in order to reliability and consistently extract profit from a market.”
In this video referencing some of his chart work and an associated tweet, popular crypto YouTuber Sunny Decree said, “Yes, I do believe that technical analysis does work. It cannot tell you exactly when and how high or how low the price goes, but, it can definitely increase the probability for a good trade.”
In a general sense, utilizing charts can be broadly useful in looking at an asset’s history, allowing the spectator to gauge if the price is relatively high or low, thus, adding information for more well-rounded trading or investing decision.
TA in crypto can be useful for risk management, giving a visual representation of what levels might be appropriate to reach for in a trade, as well as what percentage of loss any given trade can withstand, comparative to the desirable payout. If a trade has too much downside risk without enough potential gain, the trade may not be a strong one from a risk management perspective.
Many traders also use TA in the crypto space to make specific trade decisions, looking to the charts for an idea on where the Bitcoin price might lead, as well as current or future price trends. Technical analysis can be important in the crypto world as the space, in general, does not have as many factors driving price, as do traditional markets.
Things Happen a Lot Faster in Crypto
Traditional market stocks, for example, can see trading based on fundamental analysis, such as price movement in relation to dividends, earnings reports, and other data. Crypto, in many regards, is not quite at that stage yet, possibly requiring a heavier emphasis on technical analysis by itself.
In a December 14, 2017, Twitter post, John Bollinger, technical analyst and creator of the Bollinger Bands indicator, said crypto markets move more quickly than traditional markets. “It is not that technical analysis doesn’t work in crypto-currencies; it is that things happen faster,” he said.
In response, Twitter user Dr. Cryptohead tweeted an opinion that crypto markets operate too much on emotion for TA to be effective.
“TA is useless in a greed/fear//FOMO/FUD controlled market that just opened the door to mass adoption, and it’s going exponential. Try again when we hit 10 trillion,” the user tweeted. Alternatively, Bollinger then noted, “The market conditions you describe are perfect conditions for TA. The literature is full of examples.”
Bollinger has a long history and a vast amount of experience in traditional markets and technical analysis. It would make sense that Bollinger knows the markets and technical analysis well, having enough expertise to fuel such a comment.
Additionally, technical analysis success and effectiveness can depend on where the market sits on the whole, as TheChartGuys explained in a July 2018 tweet.
#Crypto The current market does not favor technical analysis and trading. It is possible but more difficult. Only the bears are getting by with some consistency. BUT this market cycle will pass, just a question of when. In the last 14 months we have seen 3 cycles…
Corrections are part of the game. Two days ago, when publishing our recent analysis, we saw Bitcoin correcting violently down, even touching $6300 on some exchanges. This was anticipated following the surge from $5000 that went only in one direction.
If someone is looking for strength in the BTC market, he would definitely find it at recent hours’ Bitcoin behavior. The volatile coin had gone through a fabulous $800 bullish run, and now testing $8000 again.
Lastly, and not for the first time, this is for sure Bitcoin’s favorite TV show:
Total Market Cap: $249 Billion
Bitcoin Market Cap: $140.9 Billion
BTC Dominance: 56.6%
Looking at the 1-day & 4-hour charts
From above, Bitcoin is now facing the $8000 resistance again. If Bitcoin succeeds in breaking, we would expect a retest of $8200 and 2019 high at $8400. Breaking up and $8500, $8800 and $9000 will become the next targets for the cryptocurrency.
From below, after the $7000 and $7250 – $7300 had proven to be strong support area, from below there is also the $7800 and $7600 support levels before reaching to the mentioned area.
– Trading Volume: The recent days had seen very high volume (and high volatility). The daily volume levels are starting to look like December 2018 numbers.
– Daily chart’s RSI: The RSI had also encountered a resistance zone of 70 – 73. However, a bullish sign might be coming from the Stochastic RSI oscillator. The last is moving toward a crossover in the oversold area; this can fuel up the market and assist in breaking up the $8000.
– BitFinex open short positions: Following the severe 40% drop of the short positions and the long squeeze, the shorts are slowly climbing and now stand on 17.6K BTC open short positions.
The eve of May 16 saw crypto’s most significant asset plummet more than $1,000 on several exchanges, with various altcoins also recording severe losses.
Several former Binance initial exchange offering (IEO) assets, however, saw sharp upticks in USD valuation following Bitcoin’s price correction. A day after Bitcoin’s dive sees MATIC, CELR and FET strongly in the green, contrasting most of the market.
Matic Network (MATIC), a hot topic on Twitter lately, nearly tripled in value this week against USD. The asset surged from about $0.005 (half a penny) to highs of about $0.014 on May 17, according to CoinMarketCap.
MATIC only dropped down to about $0.0097 on May 16 before rallying to new heights after. At the time of this writing, the token sits at about $0.0141, showing an increase of more than 37% for the past 24 hours.
Image Courtesy: CoinMarketCap.com
Fetch AI (FET) also is up considerably in terms of 24-hour gains against USD after the Bitcoin carnage. As of press time, FET has gained more than 24% over the last 24 hours. The asset hit a local low of around $0.117 on May 16, before flying up to about $0.177, its May 17 high as of press time.
Image Courtesy: CoinMarketCap.com
Celer Network (CELR) also has seen a notable uptick since yesterday, as the asset shows a 17% 24-hour gain. The token dropped down to $0.0099 on May 16 and then rallied up to $0.0137 by press time on May 17.
Image Courtesy: CoinMarketCap.com
Most other top market cap altcoins sit in the red, losing value overall against USD over the past day or so. MATIC, CELR and FET are the three most recent IEOs to have graced the Binance launchpad platform. All three assets show trading activity on the Binance exchange, according to CoinMarketCap.
As of writing this, the reason for the IEOs rise remain unknown. However, it will be interesting to see if the first IEO of 2019, BitTorrent, will join the Friday night party as well.
Cryptocurrencies today are down by as much as 15% in a crash that could be fueled by a ‘whale’ selling over 3,600 BTC on Bitstamp. All the major cryptocurrencies are down at the moment, with Stellar (XLM) being the biggest loser with an almost 15% decrease (24 hours).
Coin prices started to fall around 2:49 AM (UTC). During this time, BTC price dropped from $7,749 down to $7,179 in less than 30 minutes with Bitcoin’s 24-hour decline being 8.7%.
Binance Coin (BNB) was the luckiest, surviving the crash with a drop of less than 6% while Ethereum experienced moderate (7.70%) and Ripple severe (12.44%) losses.
Major BTC dump in the background
At 3:02 AM (UTC), data shows a massive 3,645 BTC sell order on Bitstamp worth $26 million at that time.
While there can be more reasons, it is possible that the Bitstamp sell-off triggered massive dumps across all BTC markets as Bitcoin was falling sharply.
“This last drop was likely caused by a combination of profit-taking and also algorithmic trading compounding the sudden fall. We can expect these types of steep rises and drops to continue for some time until institutional investors grow market volume,” Kenetic Capital co-founder Jehan Chu said to CNBC.
Book exhaustion on Bitstamp leading all #bitcoin markets down in a huge dump.
Yesterday, CryptoPotato reported that the number of BTC shorts on Bitfinex had decreased significantly by 40% while Bitcoin long positions remained relatively steady (only dropping by 4%).
This event created the settings for a long squeeze, which could have commenced by now. A long squeeze can happen when the number of open shorts is low, while open longs are high.
During a long squeeze, the price of an asset suddenly drops inciting further selling.
Basically, the same has happened with Bitcoin experiencing a considerable price drop of $600 within less than 30 minutes.
While the number of BTC shorts on Bitfinex remained steady since yesterday’s article, BTC longs have started to drop the same time as the coin’s price crash and continued to fall by a total of over 10%, which is a very rare occasion.
Following a crazy rally, it finally happened: Bitcoin plunged $1800 in a large red candle, driving down the price to a low of $6180 on Bitstamp.
As written here before, we had a strong clue on what was going to happen:
“Add to that a recent significant drop in the short positions caused a daily 38% decrease, as the short positions are now at their lowest point over the past year. The number currently stands around 17K BTC open short positions. As a reminder, a situation where shorts are at their lower levels and longs at their high create the perfect settings for a long-squeeze.”
Does this mean Bitcoin is bearish again? It’s early to say so. So far, the anticipated correction is very aggressive but looks healthy and aggressive as this was on the way up. Besides, we mentioned here the importance of the $5700 – $6000, which was what held the market during the bear year of 2018. As long as this area hadn’t broken down, I would say that the correction is violent, but healthy.
Following the break-down of the mid-term descending trend line on the 4-hour chart, it didn’t take long, and the dump came across. As can be seen, the wick of the 4-hour candle had reached the longer-term ascending trend-line support, along with Fib level 78.6%.
As of now, Bitcoin is testing support at $7250 – $7300 (along with Fibonacci retracement level 38.2%). From below, the next significant support area lies at $7000. Further below is $6700 (along with Fib level 61.8%), $6400 and $6300.
From above, the next significant resistance is the current price area, while further support turned resistance level lies at $7600, $8000, $8200, and 2019 high at $8400.
– Trading Volume: The recent dump was followed by a massive amount of funds. It’s ok to have an ugly correction like this, but the next days will tell if the sellers had returned.
– Daily chart’s RSI: The RSI had also dropped sharply. As of now, it’s still in the bullish territory (63); however, there is always more room to go down.
– BitFinex open short positions: since yesterday, we hadn’t seen the opening of new short positions as the number increased just a little to 16.7K BTC open short positions. From the other side, and supporting the long-squeeze theory we mentioned, the open longs had sharply decreased by 10%.
Ethereum has seen a magnificent price surge totaling over 56% throughout the past 7 trading days. This price move has now allowed Ethereum to fly above the $200 level to where it currently is trading at around $265. The Ethereum coin has now created a fresh 8 month high after rising by a total of 121% over the past 90 trading days.
Ethereum remains in 2nd place amongst the top cryptocurrency coins by market cap value as it currently holds a $28.11 billion market cap, according to CoinMarketCap data.
Looking at the ETH/USD 1-Day Chart:
Since our previous ETH/USD analysis, we can see ETH/USD surged above the resistance at $194 and $200, continuing higher until recently reaching resistance at the $280 level.
From above: The nearest level of resistance above $271 and $280 now lies at $300. The resistance at $300 is strengthened by a long term bearish .5 Fibonacci Retracement level (marked in red). Above $300, further resistance exists at $318, $340 and $350 (which also contains the bearish .618 Fibonacci Retracement level).
From below: The nearest level of support now sits between $250 – $247. Beneath this, further support lies at $240, $225, $200 and $194.
The RSI has reached overbought territory which could suggest that a retracement may be coming soon. This is further confirmed by the Stochastic RSI as it currently trades in overbought territory, primed for a bearish crossover.
Looking at the ETH/BTC 1-Day Chart:
Against Bitcoin, we can see ETH/BTC managed to hold support at 0.02455 BTC and proceeded to rebound much higher. The recent price surge has allowed Ethereum to break above the 100-day moving average line, as well as above a 2.5-month-old falling trend line, to where it currently is trading at around 0.033 BTC.
From above: The nearest level of resistance now lies at 0.03424 BTC. Above this, further resistance exists at 0.035 BTC, 0.036 BTC, 0.0367 BTC and 0.038 BTC
From below: The nearest level of support now lies at 0.033 BTC. Beneath this, further support sits at 0.032 BTC (which contains the 100-day moving average line) and 0.030 BTC.
The RSI recently managed to climb above the 50 line for the first time since late February 2019, which is a strong bullish sign.
Trading volume has been rising significantly over the past few days as the interest for Ethereum starts to grow again.
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Today the number of Bitcoin short positions have suddenly dropped by 40% to their yearly lows on Bitfinex, which has created the settings for a long squeeze.
BTC Shorts, 1-day chart
BTC shorts reaching this year’s low
The number of open BTC short positions on Bitfinex were at 27,200 around 3:50 AM (UTC) today, which has suddenly dropped to 16,350 in the matter of a few minutes.
During the same time, the number of BTC long positions increased by less than 300 to 25,521 by 4:41 AM, then entered in a significant downtrend since then, decreasing its number by roughly 4%.
BTC Shorts, 1-hour chart
The number of open short positions on BitFinex reached an exceeded the this year’s low on April 8, 2019.
On that day, CryptoPotato has reported a similar event when BTC shorts have gone down by 20% on BitFinex while longs have gained momentum. Despite the sudden 20% drop, BTC’s price has remained relatively steady after the event at that time.
Another similar event happened in February, where CryptoPotato reported that long positions had gained momentum while the number of BTC shorts have gone down by 10%. Bitcoin was trading around $3600 on that day, but it didn’t take long and a week after the short squeeze took place as Bitcoin reached $4200.
Long squeeze already happening?
When the number of open shorts is low while the open longs number is high, the market usually is set for a long squeeze where the price of an asset experiences a sudden drop inciting further selling.
This could be the current case with Bitcoin as its price has started to drop during the recent hours after reaching $8390 (Bitstamp). Since then the price had recorded a low at $7746, before correcting to where it’s trading as of writing this.
While there’s no proof that this price decrease is the first sign of an ongoing long squeeze, there’s a chance that BTC’s price has been already affected by the sudden drop in the number of Bitcoin shorts, which has undoubtedly created the settings for a long squeeze.
Since our recent Bitcoin analysis, we saw Bitcoin trading around the range of $7800 – $8200.
As can be seen on the 4-hour chart, Bitcoin gained momentum on its way up following an ascending trend-line which was tested (as support) one more time during the past hours.
Since breaking up the $6000, as mentioned in our last week’s market update, Bitcoin reached $8000 very quickly (six days) with no significant correction throughout the day.
Looking at the critical Stochastic RSI oscillator of the daily chart, we saw a recent crossover pointing down in the overbought area; however, the RSI is still in the bullish territory. In case it will get into the bearish area, we would expect a deeper correction for the next days. We are not the only one thinking such correction could be healthy for Bitcoin in the longer term, as we recently heard that from the crypto influencer Tone Vays.
Add to that a recent significant drop in the short positions caused a daily 38% decrease, as the short positions are now at their lowest point over the past year. The number currently stands around 17K BTC open short positions. As a reminder, a situation where shorts are at their lower levels and longs at their high create the perfect settings for a long-squeeze.
BTC Short positions over the last day – a suspicious drop. Source: TradingView
Besides, we like to say, ‘expect the unexpected.’ Everyone, including us, expected a Bitcoin move by the time Binance opens back its withdrawals. As can be seen, nothing significant happened, as the market dropped just a little.
Total Market Cap: $255 Billion
Bitcoin Market Cap: $142.5 Billion
BTC Dominance: 55.9%
Looking at the 1-day & 4-hour charts
Bitcoin is struggling to keep up the $8000: In case it breaks down, the next level of support is likely to be the mentioned ascending trend-line (marked in orange). Below is the $7800 support, and $7600. Further down lies $7250 and $7000.
From the bullish side, $8200 – $8300 serves as the nearest resistance level, while $8500, $8800 and $9000 are further resistance.
– Trading Volume: Money is getting in – the market cap is rising over the past day as money is getting into the altcoins. In general, the volume in the crypto exchanges skyrocket, as well as traditional exchanges such as CME.
– Daily chart’s RSI: The RSI encountered resistance at 88-90 and got rejected. However, the current level is still high in the bullish territory.
– BitFinex open short positions: mentioned above – the number currently stands around 17K BTC open short positions.