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Bitcoin sees second-longest bull market drawdown with BTC price ‘stuck’ at $30K

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It’s now three months since the last Bitcoin (BTC) all-time high, but one measure suggests that holders may be waiting even longer for the next.

In a series of tweets on July 17, analytics service Ecoinometrics revealed that this year’s descent from all-time highs is the second-longest in Bitcoin bull market history.

$30,000 may stay “for a while”

It’s been 95 days since BTC/USD hit $64,500 and a major correction phase began. Investors are impatient, but despite strong fundamentals, Bitcoin spot price action seems in no hurry to leave $30,000 behind.

At 55% below the highs, Bitcoin is also threatening to cause problems for price forecasting models, including the historically unparalleled stock-to-flow.

If history is a guide, however, Bitcoin can still go sideways for months before rising to beat its record. As Ecoinometrics notes, 2013 saw a period of 197 days between two all-time highs.

“This is one of the longest drawdown Bitcoin has had to deal with during a post-halving bull market,” it acknowledged in Twitter comments.

“But 95 days is still only half the duration of the big drawdown of 2013.”Bitcoin drawdown comparison graphic. Source: Ecoinometrics/ Twitter

Back then, BTC/USD reached a price floor 69% below its previous all-time high, meaning that the current market setup could also permit levels below $30,000 and still remain within historical norms.

More broadly, however, 2013 is now looking like the year most similar to Bitcoin price events this year.

“In terms of price trajectory this correction also looks very similar to 2013,” Ecoinometrics concluded.

“If we continue like that, BTC will remain stuck around $30k for a while…”

Retail investors are anything but gone

As Cointelegraph reported, recent on-chain behavior has painted $30,000 as more than just a psychological trading zone for Bitcoin.

Related: Bitcoin price can only go up if $30K accumulation ‘reset’ continues — Research

In addition to multiple metrics supporting its importance, investors are beginning to accumulate coins once again, including those who previously sold at current levels.

Over the weekend, statistician Willy Woo updated the picture, highlighting retail investors buying and different classes of whales balancing each other out between buys and sells.

“It’s retail that drive Bitcoin bull markets. When they stop buying, that’s a bear market warning. They haven’t stopped buying,” he tweeted alongside multiple charts on Saturday.

“Last 30 days: Whales sold 4k BTC, plebs bought 31k BTC.”Flows to Bitcoin entities with less than 1 BTC vs. BTC/USD annotated chart. Source: Willy Woo/ Twitter

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SynFutures launches Bitcoin (BTC) hash rate futures contract

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​​​​​SynFutures, a decentralized derivatives exchange, has announced it will launch Bitcoin (BTC) hash rate futures, a derivative that enables trading on an important risk factor affecting the return on mining Bitcoin. Starting today, users of SynFutures can begin trading Bitcoin mining difficulty with wrapped BTC.

Why Launch

Due to the mining difficulty adjusting mechanism embedded in the Nakamoto consensus; mining output can fluctuate, leading to a variety of hash rates within a given amount of time.

Recent events, specifically China’s crackdown on Bitcoin mining, have also affected the hash rate of Bitcoin and other digital assets.

As the ‘great migration’ out of China begins, the Bitcoin mining ecosystem is expected to change dramatically; with new mining organizations and regions filling the gap left by China, which has historically accounted for more than 70% of Bitcoin’s global hash rate.

While the lower hash rate is a concern for many, other industry contributors believe it will enable more mining and trading ecosystem opportunities.

With hash rate futures, SynFutures is opening the door for traders to hedge against the risk of fluctuating difficulty for Bitcoin mining; as well as arbitrage against the price of futures and mining power and trade on future mining difficulty, in a completely decentralized environment.

Decentralized Hash Rate Futures 

To create its hash rate futures product, SynFutures designed its oracle; a device that connects a blockchain with off-chain data to validate Bitcoin block headers and extract the mining difficulty instead of aggregating contributions from feeders. This ensures the oracle is fully trustless; enabling anyone capable of uploading Bitcoin block headers to contribute to the maintenance of the oracle.

SynFutures took inspiration from interest rate futures for its futures contract design; which is used to trade or hedge the change in interest rate. Instead of just an abstract mining difficulty number; each hash rate futures contract represents the expected block mining reward in BTC for a difficulty resetting period at a given difficulty level. It can be used to perfectly hedge the change in mining difficulty.

Furthermore, every future difficulty resetting block can have a futures contract expiring on that block for hedging needs. Besides, instead of finding specific supplies and counterparties to negotiate prices, the miner can now hedge easily using derivatives.

Examples include:

  • Shorting the hash rate futures – to hedge against the risk of mining difficulty increases and lock in the number of new BTC mined.
  • Shorting BTC/USD futures – with the BTC amount implied by the hash rate futures above to lock in the total USD revenue.
  • Longing electricity futures – so that the power cost is determined.

“Securitizing mining activities has been an idea our team has been working on for a while; as we have extensive experience in both traditional financial markets and the mining industry. As the mining landscape evolves; we want to give traders the opportunity to make the most of this time; and hedge against all the factors affecting their mining returns.”
– Rachel Lin, Founder & CEO at SynFutures

Hash rate futures is the newest product release from SynFutures, which is now onboarding new users through its closed alpha.

Upcoming product launches include:

  • Auto-Hedger – a one-click solution for hedging the “impermanent loss” risk for staking in a variety of DeFi AMM trading platforms.
  • Cross margining – a way of offsetting positions to spread and reduce margin requirements.

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16% Ethereum price rebound activates a classic bullish pattern — $2.5K next?

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Ethereum’s native crypto Ether (ETH) rebounded sharply on Thursday after Elon Musk disclosed for the first time that his private rocket firm SpaceX holds Bitcoin (BTC), and Tesla would probably resuming the bitcoin payment option for its electric cars.

The BTC/USD exchange rate was below $30,000 but bounced by more than 5% after the big reveal, touching an intraday high of $32,895. Ether, which tends to move in lockstep with the flagship cryptocurrency, surged likewise.

Ether was holding onto its previous session’s gains on Thursday. Source: TradingView.com

It reclaimed $2,000 on Wednesday, rising by as much as 18.20% from its week-to-date low of $1,720.

Lukas Enzersdorfer-Konrad, chief product officer at financial services company Bitpanda, told Cointelegraph in an email statement that Ethereum would continue tailing Bitcoin in the coming sessions.

“As soon as the “big brother” finds its support level,” he added, “Ethereum will most likely follow suit.”

Classic pattern sets $2.5K target for Ethereum 

The latest bounce in the Ethereum market also originated from a support level that had earlier capped Ether’s downside attempts.

Independent market analyst, known by the pseudonym Rekt Capital, flashed a so-called “orange area” on a weekly ETH/USD chart, illustrating three bearish wicks and their ability to shied the pair from falling lower.

“ETH has rallied +16% since rebounding from the orange area,” the analyst explained, coupling the price floor with a support trendline that apprehensively constituted a Falling Wedge.

In detail, Falling Wedges are bullish reversal patterns that start wide at the top but start contracting as the prices move lower, forming a sequence of lower highs and lower lows. A bullish confirmation comes when the price breaks above the Wedge’s upper trendline with a spike in volumes.

In doing so, bulls place their upside profit target as up as the maximum wedge height.

Ether prices almost check all the boxes when it comes to trading inside a Falling Wedge pattern. Rekt Capital highlighted the same in a chart he published Thursday.

Ether falling wedge setup highlighted by Rekt Capital. Source: TradingView.com

“As long as ETH holds the bottom of the structure as support until the end of the week, [it] will confirm a return to the structure after briefly losing it earlier this week,” added Rekt Capital.

The maximum distance between the Wedge’s upper and lower trendline is roughly $850. Therefore, according to the classic technical setup, a breakout above the upper trendline could send the prices to at least $2,500.

Related: Decoupling ahead? Bitcoin and Ethereum may finally snap their 36-month correlation

Nonetheless, the prices still risk falling sharply below $2,000 based on a short-term technical setup, as shown in the chart below.

ETH falling wedge setup on its daily chart. Source: TradingView.com

The daily Ethereum chart shows price could fluctuate between $1,850-2,080 before the potential bullish breakout, noted Rekt Capital.

Kirkpatrick and Dalquist’s book titled “Technical Analysis” notes that falling wedges have a failure rate of just 8% to 11%. Moreover, the possibility of a bearish breakout has a higher failure rate of 15% to 24%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin traders watch $32K ahead of Friday’s $330M BTC options expiry

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This Friday’s weekly Bitcoin (BTC) options expiry currently holds a $330 million open interest. Considering the recent struggle to regain the $32,000 support, this event is an important test of bulls’ willingness to display reversion signs.

On July 21, Alameda Research announced that the company made Bitcoin purchases below $30,000, and Sam Trabucco, the firm’s quantitative trader, mentioned that the narrative for BTC could turn bullish because of the ongoing fear, uncertainty and doubt (FUD) caused by the China BTC mining ban, Grayscale GBTC unlock and recovery in stock markets.

BTC/USD price at Coinbase. Source: TradingView

The chart above shows that the current downtrend channel, initiated three weeks ago, might be invalidated if the price breaks the $32,200 resistance. The move seems to have been sparked by Elon Musk’s statement that his firm SpaceX also holds Bitcoin.

During the July 21 meet-up with Cathie Wood and Jack Dorsey, Musk said that despite the rumors, he completely opposes recent speculations that Tesla has been selling some of its Bitcoin position.

Elon Musk clarifies Tesla hasn’t sold bitcoin after sparking sell-off https://t.co/jPxK5jBm3m pic.twitter.com/4uA5xB8OwB

— New York Post (@nypost) May 17, 2021

It is worth noting that the rumors had some backing only because Musk gave conflicting signals on social networks. Moreover, Tesla had previously sold 10% of its Bitcoin holdings in the previous month.

The $32,000 support is crucial for bulls

Friday’s options expiry might be the first strength test of this recent bounce. If bulls want to set $32,000 as a support level, there’s no better way than causing the most damage possible to the neutral-to-bearish put (sell) options.

Bitcoin aggregate options for July 23. Source: Bybt

The first signal that bears have been trying to dominate is the put-to-call ratio. The 0.81 reading reflects a smaller amount of neutral-to-bullish call (buy) options for the July 23 expiry.

However, bears might have set themselves a trap because 96% of the put options used $32,000 or lower strike prices. If Bitcoin manages to stay above that level at 8:00 AM UTC on Friday, only $8 million put options will take part in the expiry.

Related: Bitcoin price hits $32K but derivatives metrics still show signs of weakness

On the other hand, there is $29 million worth of call options up to the $32,000 strike price. This $21 million difference favors bulls. Albeit small, it is completely opposite from an expiry below $32,000.

If $32,000 fails to hold, bears will have a $9 million lead because only 9% of the call options have been placed at $31,000 or lower.

Neither outcome is of extreme significance, but the profits could be used for the larger upcoming monthly options expiry on July 30. This is the primary reason why bulls need to hold their ground to keep the current momentum.

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.

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