The total number of long positions for Bitcoin has skyrocketed with 40% over the last few weeks. It has reached a 10-month high on the popular cryptocurrency exchange, Bitfinex. This could be indicative of an incoming long squeeze, which might bring Bitcoin’s price even lower.
Bitcoin Long Positions Surging
Long positions placed on the popular cryptocurrency exchange, Bitfinex, have experienced a serious increase as of late. Almost 35,000 positions are placed at the time of this writing. For comparison, this number was below 25,000 in the middle of November.
The last time Bitcoin long positions on Bitfinex were at such a high level was in the first quarter of the year. Ever since then, the number has been sufficiently lower, reaching a yearly bottom in May when it dropped below 18,000.
As CryptoPotato reported back in May, long positions were gaining serious momentum, and Bitcoin’s price experienced a short-term decline. On May 16th, Bitcoin reached $8390 at one point, but as the opened long positions increased, Bitcoin dropped. The price plunged to
It’s also worth noting another example from April this year. Bitcoin’s short position dropped with 20%, while the long positions were increasing. However, the price of Bitcoin remained relatively stable and it ranged tightly from $5,100 to $5,300 in the next few days.
Long Squeeze In The Near Future?
Long positions are generally opened when traders believe that the price of an asset, in this case, Bitcoin, will increase. Yet, as seen from the examples before, a radical surge in the number of long positions might trigger long squeezes that drop the price. With so many long positions at the moment, it’s interesting to see if the market will react.
Bitcoin is currently trading at around $7,300 and the overall trend appears to be bearish, after the volatile November. Another factor that may play a role is the monthly candle that closed in the red, as well.
In any case, it would be quite intriguing to see if the rising number of open long positions will impact the price, even though a direct effect hasn’t been proven yet.
Bitcoin Price Short-Term Indicators Hinting at $7.4K Weekend Bounce
The price of Bitcoin (BTC) has headed north over the last 24 hours, up over 1% at $7,272. As a result, each of the major cryptocurrencies has followed the market leader with the total cryptocurrency market cap reaching $198 billion and BTC dominance remaining steady at 67% of the total market. In other words, Bitcoin’s market cap now stands at $132 billion.
Cryptocurrency market daily view. Source: Coin360
BTC USD Weekly chart. Source: TradingView
Despite a strong finish to the week, the price of Bitcoin is down 3.2% from the opening of $7,520 on Monday morning. The 50 and 100-week moving average (WMA) crossed this week, which is typically a sign of a market shifting to a more bullish trend. But as it stands, Bitcoin remains below the 100-WMA and has been unable to break through the previous support that has now turned into resistance at $7,600.
It is critical that the $7,600 level be reclaimed in order to be able to declare that there has been a fundamental shift in market structure that favors the bulls. Currently, trading volume remains in decline, showing a general lack of selling pressure in the downtrend and this may indicate a reversal could be pending.
The MACD is trending down below zero, which is another bearish signal but there is also an unconfirmed bullish divergence building on the histogram. This helps to identify that the downward momentum is in decline.
BTC USD Daily chart. Source: TradingView
The daily timeframe shows that Bitcoin price is still supported by the point of control at $7,200; the price where the most volume has traded in recent times. This is also the middle of the current trading range and also an important level to pay attention to as a loss of support here would open the door towards retesting the range lows in the mid $6,000s.
The moving average convergence divergence indicator, or MACD, is currently below zero but the signal and MACD line are trending to the upside and crossed bullish, which can explain the attempted bullish reversal today.
Each of the daily moving averages remains in decline following a “death cross” of the 50 and 200 moving averages a few weeks ago.
BTC USD 4 hour chart. Source: TradingView
The 4-hour chart clearly shows the price failing to make it to the top of the range earlier in the week and subsequently recording a lower high. This means that now there is some compression into the low $7,000s with $7,200 propping up the price.
The 4-hour MACD and RSI are both showing
BTC USD 1-hour chart. Source: TradingView
The one hour chart shows that Bitcoin has formed a rounding bottom, which is in the process of attempting to break out to the upside.
This — combined with a bullish MACD above zero and a breakout in the RSI — would imply that there may be an attempt by the bulls to retest $7,400 over the weekend. Since weekend price action has a history of quickly reversing into the new week any weekend opportunity may be short-lived.
BTC Futures USD 1weekchart. Source: TradingView
The CME futures are currently trading with a small premium over spot prices whereas they’ve been trading with a discount in the week prior, implying that traders are generally neutral on the future price of Bitcoin versus today.
The commitment of traders report is a report issued by the Commodity Futures Trading Commission, or CFTC, which records the holdings of various market participants. As it stands, retail traders remain the most positive about the price of Bitcoin. Professional traders have moved from net long to net short and institutions remain short but there is a notable shift in their exposure to the downside.
Bitcoin Fear and Greed Index. Source: alternative.me
The Bitcoin Fear and Greed Index meanwhile shows that the move down to the middle of the range at $7,000 has helped shift sentiment to an Extreme Fear score of 22.
Historically there has been a correlation between low sentiment scores and reversal in price, but typically these reversals are seen when the index score is below 20 as was seen for a sustained period between December 2018 and January 2019.
Overall, there as some signs that Bitcoin may be in the early stages of reversing the downtrend that looks to be losing momentum. The market is shaping up to look as though there may be a push to the bullish side over the weekend, but this is likely to be temporary as has been seen in the past.
Sentiment and positioning of retail investors going into the end of the year would suggest that despite there being fear in the market, participants have not been shaken out. A shakeout may still need to occur before the BTC/USD pair and the cryptocurrency market as a whole can finally make a more fundamental reversal.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Bitcoin App Bottle Pay Shuts Down Over Impending EU Money-Laundering Laws
The bitcoin payments startup Bottle Pay shut down on Friday, citing the AMLD5 European Union regulation coming into effect Jan. 10, 2020.
The Bottle Pay app once allowed users to send tiny amounts of bitcoin using just social media texts and handles, from Twitter to Telegram. There are roughly 974 members in the project’s Telegram group.
The London-based company raised $2 million in September, The Block reported at the time. Back in December, the team declined to name any of the investors but said the startup already served 10,000 user accounts.
Bottle Pay finally released a public beta with real bitcoin in late November, and just now realized new European regulations would dramatically alter the company’s roadmap.
“The amount and type of extra personal information we would be required to collect from our users would alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community,” the company said in a statement, adding the team never charged for this service, added routing fees or sold anything to users.
First of many?
Bottle Pay won’t be the only British crypto startup impacted by the regulations, which require a strict user verification process. Similarly, the exchange Bitpanda announced on Friday it will roll out a new user registration process. Jon Matonis, chief economist at Canada’s Cypherpunk Holdings Inc., tweeted this policy applies to custodial crypto wallets.
Teana Baker-Taylor, a London-based compliance expert and director of crypto industry group Global Digital Finance, said this policy could force all crypto wallet providers in the European Union to collect know-your-customer information from users.
In reference to cryptocurrency exchanges and custodial wallets, she said they will become “obliged entities,” similar to banks and other brokerage service providers.
“AMLD5 prohibits facilitated (non peer-to-peer) anonymous transactions,” Baker-Taylor told CoinDesk. “Custodian wallet providers and exchanges will be obligated to implement customer due diligence (including KYC) and transaction monitoring. They will also be required to maintain comprehensive records and report suspicious transactions.”
Speaking broadly in June to the need for more regulation in the global cryptocurrency industry, Steven Maijoor of the European Securities and Markets Authority (ESMA) said it’s “important to have risk warnings [and] risk information for consumers going into those products” – including anti-money-laundering procedures and arrangements.
When asked how specifically that policy should apply Maijoor said deferred to the expertise of the European Banking Authority.
In the meantime, Bottle Pay tweeted that all users should withdraw their funds within the next two weeks.
Nikhilesh De contributed reporting.
Bitcoin Weekly Forecast: Let the Santa rally begin
- Bitcoin and major coins are stuck in tight ranges.
- Regulators are looking into crypto regulation and stablecoins.
- The market is waiting for Santa’s rally, which may not happen after all.
- The poll of experts improved since the previous week.
The cryptocurrency market has been painfully slow this week. With some notable exceptions like Tezos, Chainlink, and Matic, Bitcoin (BTC) and major altcoins were oscillating in tight ranges with a bearish bias. The recovery attempted at the beginning of the week failed on approach to local resistance levels, which was interpreted by some cryptocurrency experts as evidence of bulls’ weakness.
The total capitalization of all digital assets in circulation has hardly changed in the recent seven days, while Bitcoin’s market share decreased from 66.9% to 66.6% due to the strong growth of the simple of the above-mentioned altcoins.
Several regulatory topics came up to the agenda this week
The United States and Europe are anxious to get their share of the industry until it is too late. Thus, the New York state regulator proposes a new framework for coins and tokens listings. Under the proposed regulation, the companies that once received the regulatory approval for coins issuance will be able to introduce new coins without asking for additional permissions.
At this stage, the New York State Department of Financial Services (NYDFS) is gathering public comments about the plan based on a review of the existing virtual currency framework.
Europe is all about stablecoins. According to the new head of the European Central Bank, the Union needs to stay ahead of the curve. Speaking at her first ECB press-c
“Are we trying to reduce costs? Are we trying to cut out the middleman? Are we trying have inclusive finance at no cost? There is a whole range of objectives that can be pursued.”
She also noted that other global regulators, including the bank of Canada and Bank of England, are moving forward with their stablecoins projects, which means that there is a demand for such products that need to be addressed.
Russia and China are on the other side of the spectrum. A social media platform Weibo, also known as the Chinese Twitter, blocked the accounts of TRON’s founder Justin Sun and Binance. This is just another evidence of the aggressive Chinese approach towards cryptocurrency-related business.
Meanwhile, in Russia, the Federal Service of Financial Monitoring (Rosfinmonitoring) said that it was dangerous to allow cryptocurrencies in a country prone to Ponzi schemes and financial frauds. The authorities pointed out that it might be relatively easy to regulate and control the new type of asset in small countries with a high level of law compliance; however, in Russia, it may lead to a storm of financial fraud.
Bitcoin (BTC) is waiting for Santa
The market is moving towards the Christmas season. This period is usually characterized by low trading activity and virtually non-existent liquidity, as many traders take days off.
Traditionally, it is a very boring time in terms of market movements; however, traders should stay on the alert as low liquidity may easily result in unpredictable, exaggerated moves in both directions and sudden bouts of volatility.
In December 2017 and December 2018, Bitcoin demonstrated a significant recovery ahead of Christmas. This year-end growth is known as Santa’s rally, and it is typical to all financial markets. According to MarketWatch, no other month has posted a higher average return than December.
However, there is no guarantee that history will repeat. Sometimes Santa considers that traders misbehaved during the year and leave them without the long-awaited rally.
BTC/USD, the technical picture
On the weekly chart, Bitcoin (BTC) is moving within the long-term downside trend with the trendline resistance currently at $9,100. This barrier is followed by SMA200 (Simple Moving Average) daily at $9,300, and 38.2% Fibo retracement at $9,000. Is this area is cleared, Bitcoin will be out of the woods. A sustainable move above this resistance zone will improve the long-term technical conditions significantly and open up the way towards 2019 high at $13,862.
Notably, three doji candles after a strong decline resemble the formation created at the beginning of October. If this time, the price will follow the same pattern, we may see a strong recovery in the area of the trendline resistance in the pre-Christmas week.
While the weekly RSI (Relative Strength Index) remains flat, the daily indicator is starting to reverse to the upside, which may signal that the recovery is underway.
On the downside, if BTC/USD moves below $7,000, the sell-off may be extended towards the support of $6,550 created by a combination of the lower line of the weekly Bollinger Band and the lowest level of the previous week. The next important barrier is seen on approach to psychological $6,000. Most likely, it will slow down the sell-off and trigger the recovery to $7,000.
BTC/USD, the weekly chart
The Forecast Poll of experts has improved slightly since the previous week. The expectations on all timeframes show a mixed picture as the weekly chart stayed bearish, monthly forecast turned from bearish to neutral and a quarterly timeframe is now bullish. The average price on shorter timeframes stays close to $7,000, while the quarterly target exceeded 8,000, which means that analysts are more optimistic about Bitcoin’s long-term fate.
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