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Trading firm of richest crypto billionaire reveals buying ‘a lot more’ Bitcoin below $30K

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Bitcoin’s (BTC) painful plunge below $30,000 on Tuesday turned into a so-called “buy the dip” opportunity for Alameda Research, a Hong Kong-based quantitative trading firm and liquidity solutions firm headed by FTX CEO and founder Sam Bankman-Fried.

Quantitative trader Sam Trabucco revealed late Tuesday that the company purchased Bitcoin during its latest price decline, adding that the company’s cautious strategy to go long BTC/USD surfaced out of at least three “recovery” catalysts: a potential end to the ongoing crypto FUD (China ban, Grayscale epic unlock, etc.), the stock market’s intraday recovery, and weaker long liquidations in the derivatives market.

“In my view, all these points [to] a similar (if vague) direction,” Trabucco wrote.

“News impact tends to revert? I’d expect crypto to rally more. Stock market *did* revert? I’d expect crypto to have reverted more, too. Liquidation moves usually revert? Same story.”

And all these led to Alameda doing what we do best — buying a LOT more over the past day or so. This isn’t quite “sell us all you want below $30k and fuck off” territory, but we’re continuing to buy down here, because it really just seems like too much points that way. pic.twitter.com/8l01jJAnhZ

— Sam Trabucco (@AlamedaTrabucco) July 21, 2021

Panic-sell ahead? Opinions differ

The statements appeared as Bitcoin attempted a modest recovery above $30,000 on Wednesday. The cryptocurrency established an intraday high at $31,669 on the FTX exchange, which just raised a record $900 million. Later, the price corrected lower, albeit minimally, thus showcasing limited selling pressure near the said sessional peak.

Meanwhile, Naeem Aslam, chief market analyst with AvaTrade Ltd, highlighted Bitcoin’s resilience to recent bearish outlooks, with some earlier noting that a close below $30,000 would have the cryptocurrency move lower violently.

“In reality, that is not what we have seen,” the executive told Bloomberg. “The Bitcoin price has been stable, and we have not seen any panic selling.”

But Jeffrey Wang, head of Americas at crypto finance startup Amber Group, provided a cautious outlook. Speaking to Cointelegraph, the former Morgan Stanley executive said that Bitcoin continues to trade under the global risk-on influence, which may subject the cryptocurrency to further losses. He continued:

“With relatively calm price action, recently, short-term speculation and trading have waned somewhat. When we do see more volatile movements, expect more traders to show interest. But that could push the price down further if the risk backdrop remains weak.”Bitcoin’s recovery lagged the Wall Street indexes despite falling in tandem earlier this week. Source: TradingView

Edward Moya, senior market analyst for the Americas at Oanda, also weighed negatively on the latest Bitcoin–Wall Street correlation. He noted that if the United States stock indexes enter into the “panic selling mode,” it would lead the flagship cryptocurrency lower in tandem.

“It is critical that the digital coin regains ground above the $30,000 level, as a significant breach could result in a massive technical selloff,” Moya wrote in a Tuesday note.

Related: $13K Bitcoin price predictions emerge with BTC falling below historic trendline

As for Alameda, Trabucco admitted that the company had realized downside risks in the Bitcoin market, but its latest accumulation spree has been focusing more on the cryptocurrency’s long-term outlook. He said:

“We do put on fairly big delta positions longish-term for a quant team, and I’ve been glad that it’s been this direction so frequently — bull markets are way more fun.”

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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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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