Following the strong run-up in bitcoin prices yesterday, traders may now be eyeing another opportunity for further growth as the short trade is getting unusually crowded for the number one cryptocurrency.

In what appears to be short-term traders positioning themselves for a further sell-off in bitcoin on the Bitfinex exchange, the ratio of short-to-long orders on the exchange reached 1.54 during the Asian trading session Tuesday morning, a level not seen since November last year.

Short-selling essentially involves speculating on lower prices in a market by borrowing an asset that a trader doesn’t currently own in order to sell it in the market. The asset can then be bought back at a lower price later, allowing the short-seller to profit from the difference between the selling price and the buying price.

While a high number of sellers in a market is generally considered a bad sign, it also opens up opportunities when it reaches extreme levels. This is what is known as a short-squeeze, and it is something we have seen repeatedly this year as the short-to-long ratio has hit the high levels we are at now.

If the market starts to move upwards in the near future, many of the short-sellers will exit their short positions by buying back bitcoins in the open market. As the price moves further up, even more short-sellers will get margin calls or hit their pre-set stop-loss levels, forcing them to cover their shorts, and creating a self-reinforcing mechanism that can cause sharp price increases. Whether this will happen again this time, however, still remains unclear.
 

Significant arbitrage opportunities

Another possible explanation is that there is a significant amount of arbitrage going on right now centered on the Bitfinex exchange, following the surge in the bitcoin price yesterday that brought the price on Bitfinex to nearly USD 7,800 at its peak. That was close to USD 1,000 higher than on other exchanges like Coinbase, where bitcoin reached a high of about USD 6,800 yesterday.

An obvious way for traders to take advantage of a situation like that is to short-sell bitcoin on Bitfinex, while buying bitcoin on Coinbase or another exchange. That way, a trader would be profiting as the price gap between the exchanges closes.

The bitcoin price was nearly unchanged across exchanges on Tuesday morning, and still remains significantly higher on Bitfinex than on other exchanges, which many in the community attributes to speculation and fear about the status of the popular stable coin Tether.

Price differences at exchanges:

By Fredrik Vold

October 16, 2018

David Ogden – Http://markethive.com/david-ogden

Bitcoin price analysis – Break of $6,000 or breakout to $12,000?

• BTC nearing a point of breaking out on the long term.

• Falling wedge suggests, it should be upside breakout.

Bitcoin, the largest cryptocurrency by market capitalisation and defacto King of the crypto world, has been trading in a broad range of $6,000-$7,000 for past many weeks and is now reaching a point where it is potentially make or break for the bulls.

BTC/USD is down one cent of a percent at $6,185 in less than one percent range for the day, in a sign of lower weekend volatility. After falling from the upper end of the range, which is also a descending trendline resistance, BTC is now heading towards lower end of it – around $5,900.

This wedge formation, although has failed many times in the past, could be one positive trigger that the bulls were searching for. If bulls manage to bounce from the lower end of this range, then the next move on the upside should result into a breakout with potential targets of beyond $12,000 in the next few months.

BTC/USD daily chart:

Manoj B Rawal

FXStreet

David Ogden – Http://markethive.com/david-ogden

Bitcoin price analysis – BTC/USD recovery attempts capped by $6,200; Bitcoin not as volatile as it may seem, research shows

• BTC/USD movements are contained by $6,100-$6,200 range.

• Researchers proved that Bitcoin volatility matches traditional markets.

After a short-lived dip to $6,060 low on Thursday, BTC/USD found a floor at $6,100. The recovery attempts have been limited by $6,216 handle so far, which means that a stronger trigger is needed to push the coin out of this range. BTC/USD is changing hands at $6,190, mostly unchanged in the recent 24 hours.
 

Bitcoin's technical picture

A sustainable movement above $6,200-$6,216 congestion zone will open the way towards $6,300 followed by SMA50 (1-hour) at $6,340, where fresh selling interest is likely to appear. However, if this area is cleared, the upside movement will start gaining traction with the next aim at the broken downside trendline at $6,480 strengthened by SMA200 (1-hour) and psychological $6,500.

On the downside, the critical support is located at $6,100, strengthened by Thursday's low at $6,060, Once below, the sell-off will continue to $6,000
 

Pretty stable
 

A recent study performed by Stanislaw Drozdz from the Institute of Nuclear Physics of the Polish Academy of Sciences revealed that Bitcoin is much more stable than it might seem. The researcher found out that the coin market is very similar to traditional financial markets in terms of stability.

“When new emerging financial markets started to appear in Central and Eastern Europe after the collapse of socialism, the question of their stability naturally arose. A number of statistical criteria were identified at that time, making it easier to assess the maturity of the market. We were curious about the results we would get if we used them to look at the Bitcoin market, currently valued at hundreds of billions of dollars,” Stanislaw Drozdz wrote.

The research team analyzed Bitcoin prices in a period from 2012 to April 2018 and the rates of return over the same timeframe. They found out that the volatility of rates of return is comparable to mature markets.

Tanya Abrosimova

FXStreet

David Ogden – Http://markethive.com/david-ogden

Bitcoin Reaches Record-Low Volatility

It’s an open secret that trading in bitcoin has become more difficult in recent months than it once was. Traders rely on volatility to make their money, and with less volatility, there are fewer opportunities to trade. For long-term holders and users of bitcoin, however, it’s a very different story, and low volatility is generally seen as a sign the bitcoin market is maturing.

According to Gil Luria, research director at wealth management firm D.A. Davidson & Co., the recently stable bitcoin prices means that there is less speculation in the bitcoin economy.

“When speculators are involved, they drive unusually high volumes as well as volatility by trading the asset with high frequency. As speculator involvement is diminished, volumes go down and volatility goes down as well,” Luria told Bloomberg.

The same sentiment was also echoed by Mike McGlone, commodity strategist at Bloomberg Intelligence, explaining that bitcoin is now exhibiting signs of a “maturing market, so volatility should continue to decline.”

“When you have a new market, it will be highly volatile until it establishes itself. There are more participants, more derivatives, more ways of trading, hedging and arbitraging,” McGlone said.

Judging from the data, it appears the experts are right that both trading volume and volatility is down. Although most notably for bitcoin, the data confirms that the same is also true for many other cryptocurrencies.

The unusually low volatility in bitcoin is confirmed by a technical indicator known as the Average True Range (ATR) indicator, as seen in the bottom of the chart below. Looking on a day-by-day basis, volatility in the bitcoin market is now down to levels not seen since July 2017, before the huge run-up in prices seen later that year.

Bitcoin’s Next Move

Although volatility may be low at the moment, bitcoin’s price chart looks like it is about to break-out from a massive chart pattern that has been forming since the beginning of this year.

Judging from the pattern seen above, with lower highs but a floor around the USD 6,000 mark, it appears that bitcoin is about to face another battle between bulls and bears that will determine its next move.

As we have seen throughout 2018, the selling pressure has been heavy on bitcoin, but buyers have consistently shown up at USD 6,000 to support the market. Over time, sellers have become exhausted as they have not been able to drive the price further down, and we have seen lower volatility as a result. The next few weeks may give us an indication of which side is stronger in the fourth quarter of 2018.

Meanwhile, a new informal poll indicated that the usually very cautious Wall Street investors are now overwhelmingly calling a bottom in the bitcoin market. Twitter users, however, are still skeptical, with a majority saying bitcoin still has room to fall.

In either case, the next time you read a price prediction from an expert trader, you should probably take it with a large grain of salt.

By Fredrik Vold

October 08, 2018

David Ogden – Http://markethive.com/david-ogden

New Cryptocurrency Research Shows 7 Out Of 10 American’s Feel “Uncertainty” Regarding Bitcoin

Clovr recently decided to hold a research study, resulting in a publication called “How Do American’s Feel About Cryptocurrency?” In this research, which involved 1,000 Americans, the group aimed to “to understand their feelings about cryptocurrencies and to break down whether excitement (or fear) is the overwhelming emotion toward virtual money.” Ultimately, about 70% of Americans agreed that they felt “uncertainty” regarding cryptocurrency.

The information gathered in this study came from respondents that were abled between 18 and 80, though the average age is 36 years old. Participants engaged in the study by using the Amazon Mechanical Turk platform, which is a data-entry opportunity for individuals to fill out surveys and perform other work that pays out for participation, starting at $0.01.

The majority of Americans, about 9 out of 10 according to the study, have some kind of knowledge about cryptocurrency. Of that 90%, about 75% of Americans “feel they know what cryptocurrency is,” and “over 20% of the remainder believes they ‘sort of’ know what’s going on.” Clovr noted, “Almost 70 percent of respondents felt ‘uncertainty’ summed up their emotions regarding cryptocurrencies.”

When surveyed about why the participant would want to get involved with cryptocurrency, the top reason seemed to be “of riding the bitcoin wave or possibly getting in on the ground floor of an alternative like Litecoin or Ripple could most certainly pay massive returns … if they take off.”

Approximately 40% agreed that they would be more likely to participate in cryptocurrency if someone they knew was involved, which is just another demonstration of the “fear of missing out” (FOMO). About a third of the Americans surveyed already are involved in the cryptocurrency space, but the details showed that men “are twice as likely as women” to be already involved in cryptocurrency.

One of the other details included in this survey had to do with the income that participants made each year, determining if there was any correlation. Over half of the investors in the cryptocurrency industry have an income of between $75,000 and $99,999 annually. However, less than half of the participants that make under $25,000 took the time to do so. Still, Millennials “were almost twice as likely as any other generation to be crypto-investors.

The study concludes by saying,
 

“Americans appear to be divided in opinion over cryptocurrency and its role moving forward. It’s also apparent that while many think they know what it is, when asked whether explaining it to others was feasible, fewer believed they could do so, indicating a superficial understanding.”

David Ogden – Http://markethive.com/david-ogden

Bitcoin price analysis – Narrowing ranges, moment of reckoning is here

• BTC on verge of breaking out of the range.

• Upside breakout more likely than the downside.

Bitcoin, the defacto King of cryptocurrencies, is on the verge of breaking out of its month old ranged trading which has been trapped between $6,000 on the downside and $7,000 on the upside.

BTC/USD is down 0.25 percent on day at $6,569 and is stuck in less than 1 percent range for the day – speaking enough of the shrinking volatility and low weekend volumes. On the 360-minute chart, Bitcoin has been trading in a range which has now narrowed down to the point where it can only break out or down.

Chances of BTC breaking out on the upside are higher than otherwise, given the earlier trend before it fell into this range.

BTC/USD 360-minute chart:

Manoj B Rawal

FXStreet

David Ogden – Http://markethive.com/david-ogden