Connect with us

Bitcoin

New SFOX Analyst Insights Say Volatility In the Crypto Space Could Continue Throughout 2019

Published

on

It seems that the volatility experienced by the crypto market during the last few weeks could continue during 2019. This is what SFOX, a recognized dealer for institutional crypto investors, believes that will happen.

In order to understand these results, the company pays close attention to four large-cap coins: Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC). Using data from eight large exchanges and other information, the company aims at helping investors understand what can happen in the future.

During 2018, volatility in the crypto market fell. This was also related to the bear market that affected the whole industry and that started earlier in January 2018 for most of the altcoins. The last November, things completely changed. Before Bitcoin Cash’s hard fork on November 15, the market experienced a substantial drop in value, something that affected most of the cryptocurrencies in the space. Since that moment, volatility increased substantially.

Danny Kim, the Head of Growth at SFOX, explained that this volatility will continue to affect the crypto market in during 2019.

Mr. Kim commented as quoted by Forbes:

“The cryptocurrency community has been lacking the data that serious investors need to put market movements into context and make informed decisions. We hope that by breaking down the key drivers for 2018, and continuing to provide these analyses every month, we can contribute to the ongoing maturation of the crypto industry that we saw throughout 2018.”

The analysts at SFOX consider that there were three important periods of volatility in 2018. The first period mentioned is between January and February, when Facebook decided to ban crypto ads on its platform and Bitcoin was accused of being manipulated. The second period is between August and September, in which the U.S. Securities and Exchange Commission (SEC) decided to postpone the decision to launch an ETF.

Finally, as mentioned before, between November and December because of the Bitcoin Cash hard fork and the SEC taking enforcement actions against Initial Coin Offerings (ICOs).

According to Kim, Bitcoin was the least volatile digital asset compared to ETH, LTC, and BCH. These coins were also not strongly correlated with the S&P 500 and they were also negatively correlated with gold.

Kim said that as Bitcoin is in a path of maturation, the market will continue to move into lower volatility. However, there are many forces in play that could affect the market.

There are some things that could affect the price of Bitcoin and increase volatility during the coming months. The first thing to take into account is Bakkt and the launching of one of the first platforms for institutions to enter the market in a compliant and regulated way. This is expected to be launched as soon as February 2019.

On February 29, the SEC would have to make a decision on whether it will approve the Bitcoin ETF proposed by VanEck and SolidX or not. This is the last possibility for this ETF proposal to be approved. This could also help the price of Bitcoin and other digital assets to move abruptly.

Apparently, it is possible for the United States to experience a recession in the near future. Since digital assets are not correlated with the stock market, this could play an important role in increasing demand for digital assets, increasing Bitcoin’s price.

Bitcoin volatility could continue in 2019 due to different reasons. Just yesterday, Bitcoin and other digital assets dropped around 8%. At the time of writing, Bitcoin lost 4% of its value in the last 24 hours. Each coin can be purchased for $3,693 and it has a market capitalization of $64.55 billion. Ethereum fell 6.09%, Bitcoin Cash 6.13%, and Litecoin6.5%.

Bitcoin

Crypto Money Managers Unleash Social Media Algos to Predict Bitcoin Volatility

Published

on

Money managers are hungry for yield. Crypto continues to outperform just about any other asset class making this nascent market a hot-bed for alternative prediction solutions. And social media algos are front and centre of that speculation.

Cryptocurrency prices, like foreign exchange, are largely decentralized providing plenty of opportunities for smart programmers to profit from the difference. But can those same programmers hone their craft to take advantage of a new form of opportunity, social media sentiment analysis? Some seem to think so.

Reddit Gossip. Social media algos.
A high-level overview of cryptocurrency gossip via Reddit. Source: CoinGossip

Funds Head-Hunting Algo Programmers At Alarming Rates

Sentiment analysis is not particularly new, but crypto is. And retail investors don’t hang out in private meeting rooms and exclusive restaurants. They hang out on Twitter and a whole host of other digital mediums. Good-quality programmers who can tap this diamond mine are in high demand.

One report revealed that the number of blockchain job postings has soared to 4,086%since 2019. The large majority of those likely data-driven roles. According to PricewaterhouseCoopers, quantitative crypto funds significantly outperform their peers’ thanks to the analysis of online crypto chatter.

Coders with machine learning skills are particularly highly sought after. One Taiwan-based expert even used crowdsourcing to build an analysis algorithm. Mark Howard explains:

“It’s pretty hot right now, any fund that’s worth their salt, they are devoting some of their resources and allocation for sentiment analysis.”

Fake News and Paid Views

If you were thinking about jumping on the bandwagon, realize that sentiment analysis is not the holy grail of all crypto predictive analysis. At least not yet. Platforms like Twitter, Facebook, and Reddit are still plagued with bag-holders and marketers looking for every chance to punt their own coins.

BitSpread, a blockchain asset management advisory in London has built its own social media algo but warns of the dangers. In an interview with Reuters, CEO Cedric Jeanson explained:

“The sentiment itself, what we see on Twitter, can be really geared toward fake news. We are always very cautious about what we’re reading in the news because, most of the time, we’ve seen that there’s a bias.”

Scraping the most relevant data is no easy task. Indeed, getting an accurate picture of what people are trading compared to what they are saying is tricky. Part of Bitspread’s algorithm focuses on cryptocurrency exchange posts that highlight trading positions. Similar to this:

Bitmex rekt. Social media algos
Well-established exchange Bitmex reveals regular trading liquidations. Source: Twitter

Retail Interest Not Catching up in This Crypto Bull Run

The jury is still out on how successful this approach will be. Despite Facebook’s Libra recently surpassing Bitcoin on crypto Twitter, the latest Google Trends data is not very encouraging.

Bitcoin interest over time. Social media algos.
Retail interest has not regained its 2017 highs. Source: Google Trends.

While Google search interest for Bitcoin was at its highest 2019 level in June, it’s still well off the 2017 highs. Meanwhile, the price has rallied to $14 000, not far from its all-time highs. The data suggests that retail investors may not be driving this bull run as in previous years.

That could ultimately put a spanner in the works for crypto social media algos considering that institutional investors are highly unlikely to post their trades via social media. Either way, it’s early days and the volatility afforded by Bitcoin still offers potential lucrative gains.

News Source

Continue Reading

Bitcoin

Bitcoin Correction to $9,500 Could Be Followed by 20% Drop: Analyst

Published

on

Bitcoin (BTC) has been absolutely slammed over the past week. Since passing above $13,000 for the second time this year last Wednesday, the crypto has been on a clearly downward-sloping trend.

In fact, as of the time of writing this article, Bitcoin has lost 25% in the past week, falling to as low as $9,300.

Despite the fact that optimists are expecting for bulls to experience some form of short-term reprieve, historical trends and other key indicators predict a further unwinding of the cryptocurrency bull market.

Bitcoin Poised to Hit $7,500

Conceptualized by Trace Mayer, an early Bitcoin investor and funder of Kraken, the Mayer Multiple is a way of determining if BTC is either overbought, fairly valued, or oversold. It is calculated by putting the asset’s current price over its 200-day moving average.

Per an analysis of this indicator (currently sits at 1.6) by CryptoKea, a little-known analyst that accurately called the recent drop to at least $9,700 earlier this month, if you consider the Multiple, the ongoing correction looks much like the first “major correction” of 2017’s bull run.

He notes that if history repeats itself and Bitcoin reverses out of its current short-term bearish trend like it did in 2012 and 2017, it could find support anywhere from $7,148 to $8,700. This corresponds to 1.20 times to 1.46 times of the 200-day moving average, which currently sits at $5,957.

Most likely, however, Kea notes that the “most probable target” as per the use of the Mayer Multiple will be $7,505 — another 20% drop from the current Bitcoin price of $9,600.

This somewhat lines up with the target of $8,000 that other analysts hold. Per previous reports from NewsBTC, Timothy Peterson, a prominent American crypto fund manager, notes that Bitcoin’s current active account figure suggests that BTC is overvalued.

According to Peterson’s model, which takes a 30-day median (as of July 13th) of the number of active accounts on the Bitcoin blockchain, BTC currently has a fair valuation of just above $8,000.

In a tweet issued on Saturday, Josh Rager, a prominent technical analyst and cryptocurrency commentator, looked to this same level. View image on Twitter

Rager notes that a “confluence” of chart data and on-chain data suggests that a pullback “would likely bottom out at $8,000”. As he explained in the chart above, $8,000 acted as a key horizontal support and resistance level in the recent rally and 2018’s crash.

What’s more, there is also a CME Bitcoin futures gap around $8,500, which is one of the last gaps waiting to be filled.

And as Alfonso Esparza, senior market analyst at Oanda Corp, recently told Bloomberg: “[Bitcoin] continues to trade lower as comments from President Trump put downward pressure on the cryptocurrency. It could fall further to $8,000, giving back all the gains made in June.”

Drop Might be Over?

Despite this, one analyst believes that the drop is most likely over. In fact, he drew attention to almost five signs why this may very well be the case, even if it sounds crazy.

Firstly, the one-day Relative Strength Index (RSI) and the Stochastic iteration of this indicator are at their lowest levels since at least February, entering the “oversold” range. The one-day Moving Average Convergence Divergence (MACD) has tapped the zero level, despite the fact that Bitcoin is in a raging bull market according to most analysis.

Also, the Elder’s Forse Index, an indicator meant to exhibit the strength of moves, is at its lowest since November 2018; and historical volatility is almost at 100%, implying a move to the upside to return volatility to levels deemed normal.

News Source

Continue Reading

Bitcoin

Bitcoin Network Is Moving $3 Billion Daily, Up 210% Since April

Published

on

Bitcoin’s average transaction volume is topping $3 billion per day, data from crypto analytics site Coinmetrics.io reveals as of July 16.

Bitcoin’s Uptrend in Daily Transaction Value Eclipsing Altcoins’

The data — which has been adjusted to remove noise and certain artifacts, per Coinmetrics — shows an impressive uptrend in the USD value for the volume of the coin’s transactions and transfers over the past 90 days.

On April 17, the average daily value was at $1.04 billion as compared with $3.22 billion on July 16, an almost 210% increase.

The top coin has seen a significantly higher spike in volume as compared with ether (ETH), which saw a 77% increase over the same time period — from a daily average of $370 million to $657 million. XRP has seen a still milder uptrend, at 61% — with the value of daily transactions climbing from $152.5 million in mid-April to $245.6 in mid-July.

Chart

3-month chart for BTC  transactions, transfers, value, adjusted, in USD. Source: Coinmetrics.io

(Non-) Correlations

Bitcoin broke the $3 billion daily average mark on July 11, Coinmetrics’ data shows, when the coin was circling the $11,500 price point. Despite trading roughly $2,000 lower as of today — having taken a steep 11.4% hit on the day and over 24% on the week — average daily transaction value has continued to climb.

Commentators have today argued that the coin’s short-term downtrend was triggered by an antagonistic response from the United States government to Facebook’s Libra coin, which has extended to the cryptocurrency space more broadly.

Veteran trader Peter Brandt anticipates that total market cap could now correct by as much as 80% — yet argues that most of the damage will be shouldered by altcoins, not Bitcoin.

On July 7, Cointelegraph reported that Bitcoin’s hash rate had hit a new all-time high of 65.87 EH/s. Nevertheless, despite the week’s price fluctuations, this figure has continued to soar north, reaching almost 73 EH/s to press time.

source:.fxstreet.

Continue Reading
Open

Close