After a day-long period of consolidation within the lower-$6,000 region, bulls have once again lost their footing, with bears catalyzing a break below the support that had been established at $6,000. This has led analysts to note that Bitcoin is fast approaching a “bounce or die” level that buyers must defend, or else the benchmark […]
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Bitcoin (BTC) has had an eventful weekend as it dropped from $6,700 to $6,000.
The King of Crypto has tested the $6,000 support zone a few times.
This area of support is crucial as a death cross is forming on the daily chart.
At the time of writing this, all global citizens are taking precautions to safeguard their health and wealth from the devastating effects of COVID19. When we look at our favorite cryptocurrency of Bitcoin, it too is having a hard time maintaining the $6,000 zone of support that it has held onto for a week. BTC is currently trading at $6,108 (Binance rate). Its future in the markets looks very bearish as shall be explained.
Death Cross on the BTC/USDT Daily Chart
BTC/USDT daily chart courtesy of Tradingview.com
Further analyzing the daily BTC/USDT chart courtesy of Tradingview.com, we make the following observations.
Firstly, a death cross has formed as can be seen with the 50 (white) moving average, crossing the 200 (green) moving average from above. Such an event is used by many chartists to confirm a bear trend. In the case of Bitcoin, the drop on the 12th and 13th of March marked the beginning of this bear trend brought about by the economic effects of the Coronavirus.
Secondly, BTC has a resistance around the $6,900 area. This was illustrated in a previous analysis. $3,700 still remains as the strongest support in this period of crypto market uncertainty. $6,000 is also a support zone, but it could break down in the hours to come depending on how the stock markets open tomorrow, Monday, March 30th.
Thirdly, the daily MACD also looks bearish with the histograms indicating that buying has reduced. Its moving averages also look set to converge without having a chance go above the baseline to the upside.
Conclusion
With the CME futures having expired on Friday the 27th of March, one bearish hurdle has been removed from Bitcoin’s path at least for another month. However, with the Death cross forming on the daily chart, it might be a few more days of bearish market activity for BTC and the entire crypto markets. The only glimmer of hope for bulls might just be the way the stock markets open during regular floor trading in a few hours. If it is a bullish week in the stock markets, BTC might experience a bounce based on its current correlation with the S&P 500.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.
In the last week, two prominent crypto exchanges have launched Bitcoin USDT perpetual contracts.
They include Bybit and KuMex (KuCoin’s derivatives platform.)
Tether (USDT) is ranked 4th according to market cap.
Its website states the company has $6.229 Billion in assets.
Trading of Bitcoin futures contracts has become more popular as crypto traders seek volume and volatility that has now escaped the majority of altcoins. In a previous analysis, we saw how Binance had overtaken Bitmex in terms of 24-hour trade volume of Bitcoin futures contracts. This indicates that demand has grown for the BTC derivative product. In a bid to capitalize on the demand, other exchanges are now offering Bitcoin perpetual contracts denominated in the stablecoin of Tether (USDT).
KuMex and ByBit Launch Bitcoin USDT Perpetual Contracts
In a span of a week, the two derivatives platforms of KuMex and ByBit have launched Bitcoin USDT perpetual contracts. To begin with, on the 25th of March, the team at ByBit announced the launch of their USDT denominated derivative products via a live youtube AMA (ask-me-anything) session by the exchange’s CEO, Ben Zhou. In the event that was hosted by Coin Telegraph, Mr. Zhou explained that the exchange will be offering USDT perpetual contracts for Bitcoin (BTC), Ethereum (ETH), EOS and XRP.
Additionally, KuMex announced the launch of its USDT margined contracts on Friday, March 27th. The exchange went on to explain that the spot index will be calculated based on the volume-weighted average price across six exchanges. The team at KuMex elaborated on the new derivative product as follows.
Unlike the Bitcoin (BTC) Perpetual Contracts on KuMEX, all profits, losses and account balances will be denominated in USDT. To better manage trading risks, the BTC/USDT Spot Index used by KuMEX is the volume-weighted average price of BTC/USDT across six exchanges including Binance, OKEx, Huobi and KuCoin. Also, the trading volume weight will be adjusted on a quarterly basis.
Tether’s Dominance Solidified
In an earlier analysis, we had briefly stated that USDT had become the choice store-of-value asset for many crypto traders who want to wait out the current market turmoil. With both KuMex and ByBit launching USDT based perpetual contracts, it is clear that the stablecoin has continued to display its dominance in the crypto markets. This is despite all the known doubts surrounding the inner financial workings of the stablecoin.
In terms of total value, USDT is currently ranked 4th on Coinmarketcap.com with a market cap of $4.662 Billion. The team at Tether has also stated that their current assets are worth $6.229 Billion. Their balance sheet can be found below and on the Tether.to website.
Tether’s current balance sheet according to Tether.to
(Feature image courtesy of Joshua Earle on Unsplash.)
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.
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