Market report for traders

BTC and altcoins

Over the last seven days, bitcoin is up 1.74%, at AU$34,023 at the time of writing. Meanwhile, Ethereum also climbed 2.20% week-on-week to AU$2,639. And in other altcoin movements, Cardano rose 10.04%, Solana, also up by 4.27%, while Avalanche and Polkadot dropped by 2.20% and 1.27% respectively.

Could this be what rockets bitcoin…

Blackrock, the world's largest asset manager, with US$10 trillion in assets under management as of January 2022 has announced it will join competitor Grayscale in offering a bitcoin trust offering to US institutional clients.

The new offering will enable the firm’s asset management platform, Aladdin, with access to the world of crypto, starting with bitcoin.

While no exact dates have been given for the launch of the new offering, ARK Investment Analysts analysed what impact the institutional investors would have on the price of bitcoin. 

With a 1% allocation, bitcoin’s price could drive to US$100,000; however, this would increase to US$200,000 with a 2.5% allocation and up to US$500,000 with a 6.5% allocation. 

The announcement hasn’t moved the price of bitcoin over the past week, however, it’s a strong sign that institutional appetite isn’t phased by recent bear markets.

Australia tops crypto interest

A new report by Forex Suggest, a Forex trading platform, has named Australia the country with the highest level of cryptocurrency interest, with over 1,000 more searches per 100,000 people than second place.

While we have topped the list for the number of searches and indeed crypto interest, we have fallen short when it comes to adoption with Australia ranking in 15th position. 

This follows the RBA's announcement that it will collaborate with the Digital Finance Cooperative Research Centre (DFCRC) to launch a limited-scale Central Bank Digital Currency (CBDC) pilot.

Technician’s Take

Weekly chart - 6 weeks of uptrend

Bitcoin has held its uptrend for six weeks in a row, from AU$27,900 to AU$35,300 with a 26% gain. 

The last time bitcoin was in an uptrend for five weeks in a row was from mid-July 2021 to mid-August 2021. During that time, bitcoin increased from AU$40,500 to AU$84,300 with a 108% gain before it topped at AU$93,500.

Daily chart - Bitcoin held its 21 day Exponential Moving Average (EMA) support

On the 10th of August 2022, bitcoin (BTC) broke the 21 day EMA and dropped to AU$32,600, but it quickly bounced back up and closed the day at AU$33,800 with above average volume. The quick bounce proved that there were a lot of buyers waiting to buy BTC at 21 day EMA

In the next few days, bitcoin reached its resistance as high as AU$35,470 before it settled down at AU$34,500.

For the third time, bitcoin failed to break its resistance at AU$35,470. If bitcoin can break this resistance then bitcoin could continue its uptrend.

BTC volatility has continued to decrease, which is shown by the downtrend of its Average True Range (ATR) - an analysis volatility indicator. The last time its ATR was this low was on the 29th of November 2020 before bitcoin started its exponential growth.

Key:

1. 50 Simple Moving Average (SMA), blue line
2. 200 Simple Moving Average (SMA), black line
3. 21 Exponential Moving Average (EMA), red line

Beginners recap:

• Bitcoin failed to break its resistance at AU$35,470 for the third time but it has continued its uptrend for six weeks in a row.
• Bitcoin volatility has continued to decrease. The last time bitcoin had its volatility this low was on the 28th of November 2020 before bitcoin started its exponential growth.

Disclaimer: The information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions.