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Daily Bitcoin and Crypto Analysis

Daily BTC Analysis: The Weekender

October 25, 2021

Matt Blom

This week saw the First Bitcoin ETF launched in the US, and on day one, eager investors traded $280 million worth of shares in just the first 20 minutes. By the time the market closed on Tuesday, nearly $1 billion in shares had changed hands.

Welcome to the Weekender: Your weekly round-up of the stories driving crypto prices during the last 7 days, as voted by our readers' clicks.

ProShares’ Bitcoin Strategy ETF began trading on the New York Stock Exchange under the ticker BITO after receiving approval from the U.S. Securities and Exchange Commission on Friday. Investors wanting exposure to the biggest cryptocurrency were able to buy shares tied to the future price of Bitcoin, which rose to $42.15 at one point—a 5.4% increase from the initial net asset value of $40. The shares ultimately closed at $41.94, an increase of 4.85%.

The week ahead will see the VanEck Bitcoin Futures ETF begin trading, which will then be followed by Nashville-based Valkyrie’s Bitcoin Strategy ETF, which is set to trade on the Nasdaq under the ticker BTF and will track the value of Chicago Mercantile Exchange (CME) Bitcoin futures.

Futures contracts are financial contracts the value of which depends on, or is derived from, the underlying reference asset. In the case of Bitcoin futures, the underlying reference asset is Bitcoin.

Continuing the trend of opening up this asset class to a wider range of investors, Brokerage firm Interactive Brokers Group has announced that it is launching crypto trading for investment advisors. 

The firm is bringing cryptocurrency investment to investment advisors in the U.S. to help streamline the process of investing clients’ funds in the market. Financial advisors are able to invest and custody cryptocurrencies like Bitcoin, Bitcoin Cash, Litecoin, and Ethereum for their clients with the new feature.

The world's leading payment services provider processed $145.60 million worth of Bitcoin trades on the day BTC rallied to its record high of $67,000.

The latest spike in volumes came out to be the highest since the May 19 Bitcoin price crash from around $43,500 to as low as $30,000. On the day, some $304 million worth of BTC changed hands, almost double the volumes logged on Oct. 20.

Notably, PayPal allows users to start investing in Bitcoin by putting as little as $1. As a result, the payment service firm has emerged as a viable platform for retail investors, a move seen by the industry as a cue for wider crypto adoption.

Interestingly, since PayPal's push into the crypto sector, the count of unique addresses holding at least $1 worth of BTC has surged from 26.83 million on Nov. 20, 2020, to 33.89 million at press time. Meanwhile, on Oct. 20, the count was 34.12 million, an all-time high.

U.S. retail giant Walmart has partnered with coin-cashing machine company Coinstar and crypto-cash exchange CoinMe to install 200 Bitcoin ATMs in its stores across the U.S. According to Bloomberg, although the pilot includes only 200 kiosks, the broader launch plans to eventually see the installation of 8,000 bitcoin ATMs across the country. There have been no further details on timelines as of yet.

According to Coin ATM Radar, there are currently over 25,000 bitcoin ATMs at select grocery stores and service stations in the U.S. Coinstar operates 4,400 kiosks enabled for Bitcoin purchases across 33 states.

Billionaire investor Carl Icahn thinks Bitcoin may be the best hedge for inflation. Icahn warned that the next market crisis may be on the horizon, and Bitcoin (BTC) could be the best hedge against inflation. With the United States government continuing to stimulate the economy, Icahn stated that he fears the U.S. dollar is becoming more devalued and that the price of goods is rising.

“In the long run, we are certainly going to hit the wall. I really think there will be a crisis the way we are going, the way we are printing money, the way we are going into inflation. If you look around you, you see inflation all around you, and I don’t know how you deal with that in the long term,” Icahn said on Monday with CNBC.

His comments were in line with Federal Reserve Chair Jerome Powell, who mentioned that inflation was rising along with supply issues.

“As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors,” Powell said in prepared remarks. “These effects have been larger and longer-lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2% goal.”

Can we have a show of hands for all those who believe the Fed's inflation predictions will continue to be incorrect?

You can all put your hands down now.

Have a great Sunday!

Words of the Week

Technical Analysis

30 Mins

Day-traders are nervous as Bitcoin holds the psychological $60,000 level,

although HODLers are the most stoic, vowing never to sell.  

Bitcoin has fallen outside the up-trending channel and fighting to hold.

A good cleanout in price would be a 50% pullback in price of the move up from
$39,600 to $67,000, or $53,300


Support:      $60,000, $57,500 - $58,500 (firm) and $53,300   


Resistance: $64,850 and $67,000 ATH

Daily

A second bearish engulfing candle printed over the weekend followed by

an indecision candle. It’s a coin toss from here regarding direction. Bitcoin can easily pivot and rally, but there is no edge technically on this asset. Bitcoin dominance had fallen to 44.75% from the highs seen last week as the price ran up to $67,000 ATH.


Oscillators continue to pull back, RSI turning down and MACD negative, although the

bitcoin price is holding the $60,000 psychological level.


A stronger support is seen in the $57,500 to $58,500 zone.


Support:     $58,500 and $53,300     

Resistance: $64,850 and $67,000 ATH

MA:              50-day $50,949, 100-day $46,942, 200-day $45,260

RSI:              59.5% - dropping/neutral


MACD:         momentum has gone negative for the first time in October

Weekly

Long term , technically bitcoin is bullish, but markets do not go up forever and expect pullbacks.


Support:      $54,700 and $48,250 (both weekly candle closes prior)

Resistance: $64,850 and $87,000

RSI:              64.5% - bullish


MACD:        Positive momentum - bullish

The Market in Numbers

 

This Weekend's Coffee Reading!

What has been standing in the way of a pure-Bitcoin ETF?

With regulators slowly starting to come to terms with Bitcoin as an asset, how could this affect the present and future views of BTC ETFs?

With regulatory bodies rumored to soon accept a pure Bitcoin (BTC)-backed exchange-traded fund, it is important to understand the journey of some of the first crypto-based ETFs that have recently been approved by government agencies.

The United States Securities and Exchange Commission approved a Bitcoin-adjacent ETF, giving investors the opportunity to gain exposure to Bitcoin through the stock markets, and the most recent acceptance was that of the ProShares Bitcoin Strategy ETF, which started trading on NYSE Arca on Oct. 19.

It's important to note that the aforementioned exchange-traded funds are not pure-crypto ETFs and merely track either crypto-related company stocks or futures contracts.

The SEC has yet to approve a pure-crypto ETF, unlike Canada back in the spring when regulators approved three Ether (ETH)-based ETFs from three different firms: Purpose Investments, Evolve ETFs and CI Global Asset Management.

Despite the good news of regulators beginning to accept crypto ETFs, many questions remain about why there have been so many challenges in listing them. This fall, there has been a lot of anticipation and speculation around what ETFs are exactly and how they can boost — or hinder — the crypto market as a whole. Here are the issues, challenges and possible future of crypto-backed exchange-traded funds.

Regulatory mismatch

Exchange-traded funds, in general, are investment funds that track a basket of assets on the stock market and can be traded in the same manner as regular stocks.

While there are ETFs for just about any asset, the problem with crypto is that there is still uncertainty among regulators about how to define Bitcoin and other cryptocurrencies, and how to protect consumers against risk exposure. Those issues could present a challenge as pure-crypto ETFs begin to appear on stock markets, as not having regulatory clarity could cause problems with regulation across various national bodies and around the world.

The various financial regulatory agencies of the United States, for example, all have different — sometimes conflicting — views on what cryptocurrencies are, especially when it comes to taxation and trading.

In 2020, France’s principal financial regulator, the Autorite des Marches Financiers (AMF), responded to the European Commission’s guidance on so-called “crypto assets,” stating that it is still too early to explicitly define them. A spokesperson told Cointelegraph at the time:

“The AMF considers that giving a precise classification applied to crypto-assets could be premature at this stage. It is only after solid feedback that we will be able to judge the relevance of a precise classification (e.g. ‘utility tokens’, ‘security tokens’, ‘payment tokens’, ‘stablecoins’ etc.).”

You can access the full report by clicking here.


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