Bitcoin (BTCUSD) (CRYPTO:BTC)

CRYPTO UPDATE

The triangle we spotted on Bitcoin was very effective and broke its resistance with a nice candlestick that made it take almost 6% in one day.

The take profit target is still located at $56,000, close to an important supply area (many sell orders pending in the order book). The price is currently operating a pull back on the resistance zone it broke recently, this is perfectly normal and occurs in about 60% of cases (Chartist analysis, by Francois Barron), this could also be a very good entry for investors who missed the low of the triangle and its breakout (we can also wait for the breakout of the last high.

Investors who took position at the low or middle of the triangle currently have a nice profit (+20-10% at the time of writing, +30-20% at the high), and can expect much more, if the pattern materializes until the end. The most sensitive (and they are right) to money management have already moved their stop loss beyond their entry point, and can no longer, regardless of future developments, lose money.

It is interesting to note the high correlation between Bitcoin and other cryptos. Indeed, since the break of the triangle on Bitcoin, the main other cryptos have all experienced interesting gains this week, including Ethereum (which also broke a triangle from above), and Solana (+60% for a week). The case of Solana is very interesting because we had two chartist figures, a triangle and a triple bottom that led to this rise of 60% in 1 week and 80% since March 11.

Although probabilistic, chartist analysis remains an extremely powerful tool to evolve with more confidence in the chaotic financial markets, no matter what the detractors say, provided of course to retain this elementary but crucial rule that is missing to 90% of investors, and allowing to extend its life (in the financial markets) on the long term: to have a perfect control of its money management.

CRYPTO UPDATE

Last time we saw that BTC was oscillating within an ascending triangle. The pattern has been effective and the price has indeed touched the $45,000 mark today, which is the resistance of the triangle and an area that many economic players are positioned on.

2 scenarios seem to be taking shape:

1. The price breaks the supply zone ($45,000-$46,000) and continues its ascent to the take-profit zone that we have defined at $56,000. Nevertheless, the price has reached the triangle resistance faster than expected and if there is a breakout in the next few days it would be a bit early (generally, a triangle has a better probability of success if the breakout occurs at 2/3 of the triangle length)
2. The price bounces off the resistance and continues its advance within the chartist pattern, hitting the $40,000 area before making its final ascent.

Traders who entered on the bounce on the triangle support are in profit and can choose to close their position now, or wait for the triangle to break and strengthen their position if it does. They can also choose to raise their stop loss to break even if they don't want to take any risk in case the price bounces back as seen in point 2. For the others, it would be quite risky to go long now, as long as the supply zone has not been clearly broken. Finally, the most reckless traders (who like to play against the trend while having a good command of money management and derivatives allowing to short) can try to rebound on the supply zone with a stop loss at $46200 and a take profit at $40,000 for a reward/risk ratio of about 3/1.

BITCOIN MINING, A STEP TOWARDS ENERGY INDEPENDENCE

In the U.S., more and more political actors are promoting the creation of a clear regulatory framework for cryptocurrencies. Many of them also argue that cryptocurrency mining would be an opportunity for the development of the energy sector in the US.

Many political leaders have understood, far from the usual clichés, the huge potential that cryptocurrency mining represents. For example, the city of North Vancouver, Canada, will be the world's first Bitcoin-powered city by the end of 2022, with an innovative low-carbon heating solution. In the United States, Congressman Pete Sessions says the mining farm industry could help America achieve energy independence.

It's true, in fact, that mining already prevents the waste of excess energy from already existing structures, but beyond that, the revenue from crypto mining provides funding for future energy facilities.

Since January 18, 2022, Bitcoin has been oscillating within a clearly visible ascending triangle in daily units. According to empirical statistics gathered over time, traders have learned to view this chartist pattern as one with a higher probability of leading to an upward movement.

Currently, the price is sitting at the $41,100 mark, which corresponds to the support line of the triangle (analysis done on the Binance Futures BTCUSDT chart). By taking the distance between the highest and lowest points of the triangle, and using this distance as a profit target, we get a profit zone of around $56,300.

An aggressive trader can therefore place a buy with a take profit at $56,300, and a stop loss below the support line at $36,700. The more cautious trader can monitor the triangle daily, waiting for the resistance breakout at $45,000 before taking a position. Keeping in mind that charting is not an exact science (and this is the main reason to have an extremely strict money management) and that the markets are even more uncertain in this period with the Russian-Ukrainian conflict that causes daily repercussions on all markets.

THE HIDDEN ACCUMULATION

After declaring in 2017 that Bitcoin was most likely headed straight for $0, and currently many bankers still criticize the volatility of Bitcoin and crypto-currencies, there is much less vehemence behind the scenes. It is known, for example, that as of June 2021, Morgan Stanley Bank has "officially" begun accumulating Bitcoins.

Moreover, a recent analysis by MacroScope, a specialist in institutional trades, shows that Morgan Stanley has greatly increased, in many of its institutional funds, the number of its BTC holdings (by buying shares of Grayscale BTC). Most of these are relatively large double-digit increases (e.g. +18% for Morgan's Growth Portfolio). Thus demonstrating the appetite and desire of the American bank for this asset, and it is certainly not the only crypto it accumulates.

According to the analysis, we can see that with the frequency and volume of these purchases, the bank could become the main whale (known) of Bitcoin, and very quickly. Indeed, the CPOAX would have recently bought about $71M in BTC (or more than 1600 BTC). We can therefore understand why JP Morgan Bank, "thanks to the influx of liquidity", is very bullish and sees a BTC of $150,000 in the long term

VOLCANO BONDS OF EL SALVADOR

On September 07, 2021, El Salvador formalized BTC as its national currency. Since then, President Nayib Bukele has not stopped encouraging and announcing new and promising projects in the world of crypto-currencies.
One of these projects is the use of BTC to issue government bonds.

Indeed, in November 2021, the president announced the upcoming creation of a futuristic city, insisting that the financing of this structure should be done through the issuance of bonds: Volcano bonds.
According to local sources, El Salvador is almost ready to issue bonds. The Minister of Finance said that the preparation phase of the issue should be completed by March 20, 2022. When this phase is completed, the country will be fully ready to issue its bonds, which will be worth $1 billion.

It is important to point out that the big difference of these bonds is that they will be able to be purchased in BTC or other cryptocurrencies, democratizing access to all participants of the crypto ecosystem.
The bonds will also be listed on the stock exchange and accessible to anyone willing to invest a minimum of $100.

After making history as the first country in the world to nationalize BTC, El Salvador is taking another step forward by becoming the first country to issue debt via crypto-currency. Not missing thus to taunt the IMF which had tried to force the reversal of the president towards conventional currencies, but had only reinforced his desire for sovereignty for his country.

CRYPTO UPDATE

The battle between buyers and sellers is raging within the market, and currently, the sellers seem to have largely won. Indeed, against all odds, the market made a bullish jump today. Ether took +10%, SOL +9%, AVAX +11$ and BTC +9%.

BTC even had the luxury of breaking through its $40,000 resistance with a strong bullish candle, and could even close the day near $41,000. At the fundamental level, it is possible that the turnaround in Russia has reinforced asset buying.

Indeed, after the thunderous announcement by the Russian central bank to ban cryptocurrencies, many internal voices have risen up against this sanction by underlining the folly of such an action (some even see it as a new market manipulation in view of buying back the assets at lower cost). We can also underline the fact that El Salvador asserts its sovereignty and totally rejects the injunctions of the IMF warning it against its pro-Bitcoin policy.

CRYPTO UPDATE

For the past week, the crypto-currency market has been plunging continuously, almost in a straight line. Indeed, the total market capitalization is now valued at $1.647 trillion, after a 17% plunge since January 19. It is also worth noting that the NFT and Metaverse markets have also taken a beating, and for the time being are not uncorrelated with the rest of the market.

As for the main cryptocurrency, Bitcoin, after reaching the $33,000 area, the asset has breathed a sigh of relief today and is currently trading around $36,000. The oblique resistance zone has not been broken, however, so we are still in a bearish trend. The next downside targets are the recent low of $33,000, as well as the large support area of $31,000 - $28,000 which contains a lot of liquidity and should continue to attract the price. The major resistance in the case of an expected resumption of an upward movement, meanwhile, is still located at $40,000.

Finally, the FED has hinted that it will probably raise interest rates in March. The crypto market did not react to the news and remained rather stable following the news, however, the behavior of investors in the coming days should give us very interesting clues as to whether or not the downward movement will continue.

CRYPTO UPDATE

Sought after since the beginning of the year, BTC's $40,000 support finally gave out yesterday, under tremendous pressure from sellers.

On the fundamental side, the fear of the FED raising interest rates, the global geopolitical tensions around Mali and Ukraine, as well as the Russian central bank's proposal to ban cryptocurrencies and mining, got the better of buyers.
On the technical analysis side, the head and shoulders pattern that has been visible for some time has finally come to fruition, after a pullback to the neckline.

With our emotions put aside and the analysis being cold, the next support is at the $30,000 mark. Nevertheless, if the pattern turns out to be fully realized, $15,000 would even be possible. If it turns out that the bulls are taking over, the 1st key resistance to cross would be the old $40,000 support.

The market has completely turned around and Bitcoin has taken a lot of assets with it (BTC: -12%, ETH: -16%, BNB: -15%, AVAX: -18%, ...). Nevertheless, this test will be extremely interesting to see if the market will remain correlated to Bitcoin for long.

CRYPTO UPDATE

At the end of the week, the crypto market has been quite calm.

Indeed, apart from the announcement of the date of the transition of Ethereum to the Proof of Stake (which we will come back to), which should happen in June, no major news has impacted the market.

We can nevertheless note that some assets, such as the FTM token of the Fantom blockchain, have recorded interesting gains. Indeed, the token has taken 50% since Monday, going from $2 to $3.

Ether, on the other hand, has welcomed the announcement of the date of its new blockchain with a gain of 10%.

Bitcoin, which serves as a reference, is still searching for its price, which varies between $43,000 and $44,000. Remember that as long as we stay above $40,000, we keep an optimistic scenario in mind. Indeed, buyers can decide to take action at any time. The bullish target still remains the resistance at $46,000.

CRYPTO UPDATE

The cryptocurrency market has had a rather complicated start to the year. Bitcoin, which can be referred to understand (for now) a good part of the market, due to correlations, has indeed flirted dangerously with the $40,000 area, and even went below it for a few minutes on Monday morning. Nevertheless, buyers decided to take over, and this support (which, let's remember, has been holding since October 2020), served as a rebound zone, allowing the price to return to $44,000 today.

The next bullish target for Bitcoin is the $46,000 area (which would also invalidate the bearish head and shoulders that was dangerously threatening the asset). However, the $40,000 support area will be closely watched as it remains a key factor in the resumption of the uptrend.