Bitcoin and Crypto Market Updates (February 6th)

Bitcoin and Crypto Market Updates (February 6th) 512 288 Crypto Rand Group

Bull Market back on? Or is this a trap?

Honestly guys… It’s a minefield.

I’m just going to try and really simplify things here today and create a plan purely from the technicals based on what I see in the charts.

Bitcoin Update

BTC – Starting with the big boy – I put this chart together and shared it back in November and it’s pretty much playing out as expected… Minus the TWO retests that I DIDN’T GET… we just ripped. Not bitter about that at all… Ugh.

Anyway, for me, BTC is in a long-term accumulation pattern unless it can negate. To negate and convince me we’re heading into a new bull market we want to see price acceptance above 25/28k… If we can get that then this negates the accumulation pattern and we have to consider the possibility that we are in a renewed bull… 100k here we come.

On the flip side, we have to be wary of a reversal HERE OR at the 25/28k levels…

So in summary it’s all about what happens at 25k/28k to determine if we are in a new bull market OR if we’re going to see the accumulation pattern come to fruition and revisit the range lows. Until we visit these levels I’m chilling… no need to fomo…

Another chart I’ve been obsessing over the last few days is ARKK – This is the Cathie Wood innovation ETF – IMO a perfect insight into the retail trader. Imo this is a TEXTBOOK BULLISH THREE-DRIVE pattern – We had the capitulation… that’s done… everyone got overly bearish… markets needed to pull back, create euphoria… then one final depressing dump / slow bleed.

Honestly for me right now this captures everything… From the ‘’anger lows’’ all the way to today we have seen animal spirits are still alive, if people have been laid off they are sat on juicy severance packages and pumped that back into stonks… Now we see the true reckoning… a nasty slow bleed down right into ‘’depression’’

That completes the final leg of the 3 drives pattern.

Now just as with BTC, forgetting all the noise, macro, blah blah blah… If this can negate the 3 drives pattern then again I have to consider we are in a renewed bull and the pain is truly over.

You will be rewarded with patients here and keeping your cool.

My hope is.. and I’ll be observing if BTC can hold this pattern… while ARKK bleeds out to make new lows. Hope that all makes sense. 

Sberbank DeFi platform

Russia’s largest bank, Sberbank, is expected to launch a DeFi platform by May of this year. The platform will be built on Ethereum and be accessible by users through Metamask. Sberbank’s product director said the platform is currently running in closed beta and should have open testing by March 1st 2023. Sberbank has 110 million customers and over 1 million corporate clients on its books.

Uniswap vote shot down by a16z

Crypto venture capital fund a16z has single-handedly shot down a proposal to deploy Uniswap v3 on the BNB chain. The VC used their 15 million UNI holdings to vote against the proposal in the DAO governance vote. The proposal detailed using another project Wormhole for the bridge, where a16z is a key investor in competitor project LayerZero. The proposal had 80% YES votes to pass the proposal until a16z squashed it completely. Is this the fair way to govern DeFi protocols, or does it just show how centralised decentralised finance (DeFi) still is?

NFT project Checks

The NFT market has been taken by storm in recent weeks by an open edition project called Checks. Artist Jack Butler created a human psychology experiment with NFTs and in just a few weeks the floor prices went from $8 to almost $3000 per NFT. Clean art, burn mechanics, human psychology and game theory have made this the highest traded NFT collection in recent weeks, even surpassing Bored Ape Yacht Club… awesome.

Brands into Web3

This infographic shows how many premier brands have entered into the Web3 space in the last couple of years. Although many have only dipped their toe into the space, it shows how traditional brands are aware and becoming active in Web3.

We have seen the likes of Mcdonald’s, Adidas, Nike, Warner Brothers, Reddit, FIFA, Porsche and countless others in the last couple of years. We can only expect this number and their presence to increase in the future… imagine a bull run.

Crypto Payments on Twitter

Twitter is due to launch an upcoming payments tool for the platform which will initially support only fiat currencies, but CEO Elon Musk wants it to be built with cryptocurrency support in the future. Mainly speculation at the moment but the move aligns with Elon’s vision of turning Twitter into the ‘everything app’ as he tweeted in October of last year “Buying Twitter is an accelerant to creating X, the everything app”

FTX asking politicians for their money back

Former FTX CEO, Samuel Bankman-Fried spent millions in recent years lobbying for favourable crypto regulations via politicians, spending millions in the process. FTX is now trying to claw some of this money back by asking for the donations to be returned in a series of confidential letters to those involved. Given the bankruptcy proceedings for FTX, these funds are presumably to help recover some of the losses and repay debtors. SBF made more than $90 million in political lobbying donations.

Spot vs. Derivatives Trading

Investing in the financial market offers a variety of opportunities to generate profits, but it can also be overwhelming to choose the right type of trading. Spot and derivatives trading are two popular options, but they are vastly different in their approach, benefits, and risks. In this article, we’ll guide you through the key differences between spot and derivatives trading, so you can make an informed decision on which is best for your investment goals.

Understanding Spot Trading

Spot trading is a straightforward form of trading that involves buying or selling an asset at its current market price. This type of trading is used by investors who require immediate ownership of the underlying asset. If you’re looking to purchase physical commodities such as gold, oil, or currencies, spot trading is likely your best option. The settlement of the transaction is immediate or within a few days, and the price of the asset is determined by the supply and demand in the market.

The benefits of spot trading include lower trading fees compared to derivatives trading and a lower risk of liquidation as you own the underlying asset. However, spot trading also exposes you to market price movements and the associated risk.

Exploring Derivatives Trading

Derivatives trading, on the other hand, involves the buying and selling of financial contracts that derive their value from an underlying asset. This type of trading is ideal for speculating on the future price movements of an asset without actually owning the underlying asset. Derivatives come in various forms such as futures, options, and swaps, and the settlement of the transaction can take place at a future date.

One of the main benefits of derivatives trading is that it allows you to use leverage to increase your potential gains. However, this also increases your potential losses and the risk of liquidation. In addition, you may be required to post collateral as a loan, which exposes you to the risk of losing more than your initial investment.

There is also the advantage to short the markets and make a profit when prices are trending down, or use that ability to hedge.

Making an Informed Decision

Spot and derivatives trading each offer their own set of benefits and risks, and it’s essential to consider the following factors when choosing which type of trading is best for you:

  • Settlement: In spot trading, the settlement takes place immediately or within a few days, while in derivatives trading, the settlement can take place at a future date.
  • Asset Ownership: In spot trading, you own the underlying asset, while in derivatives trading, you do not.
  • Risk: Spot trading exposes you to market price movements and the associated risk, while derivatives trading exposes you to the risk of liquidation and the possibility of losing more than your initial investment due to the use of leverage and the requirement to post collateral.
  • Purpose: Spot trading is used for immediate needs such as currency conversion or physical commodity purchases, while derivatives trading is used for speculation and hedging.
  • Leverage: Spot trading does not involve the use of leverage, while derivatives trading allows you to use leverage to increase your potential gains.
  • Trading Fees: Spot trading typically involves lower trading fees compared to derivatives trading.

Final Thoughts

In conclusion, both spot and derivatives trading can be profitable, but it’s crucial to understand the details of each type of trading, including the market mechanics and the various strategies available. You can navigate the financial market and achieve your investment goals with the right knowledge and approach. Take the time to educate yourself and choose the type of trading that best suits your needs and goals.I personally use both, short-term positions where derivatives and leverage come in handy for me while the use of spot is great for long-term, especially to avoid the cost of maintenance fees and risk of liquidation. 

Now is the time for you to figure out what is best for you!

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