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April 16: When Memories Last A Lifetime

Trading Crypto with Eugene is a series of daily commentary on the crypto market and trading advice from Eugene Ng of Matrixport, a veteran trader with 10 years of experience in top-tier global investment banks. If you like the article, please follow us here on Blockchain.News so you won’t miss our future publications.

BTC now up 2%. Between my post yesterday and now, you would notice that it first dropped $500 to $6,400+ before getting here. So what happened? It started with poor Wallstreet earnings and awful U.S. economic data, U.S. equity indices were mostly down last night, driving risk aversion across asset classes. Asia opened up today less gloomy, US equity futures started to retrace some of its losses, and less selling momentum in BTC which led to some stop-loss driving this move higher.More impressively ETH outperformed BTC, now up almost 6% with ETH/BTC pair in clear breakout fashion. The interesting headline made by Messari that the daily average transaction value across ETH network is now equal to that of BTC, would have possibly added to the herd-mentality in crypto. Tonight everyone’s going to be watching the jobless claims number that street is looking for 5mil losses, which means around 20mil people are sitting without a job in the U.S. So how do we trade today? With continued nervousness in traditional markets, I think we stick to our gameplan, sell on a rally; and where? I think we can start selling here $7,050 and target $6,800 / $6,600 / $6,300 in the short-term. For the last three weeks, whenever BTC pops $500 to $1,000, it almost always gives back its gains in the following days (if not hours). Not forgetting, realized volatility is now back to pre-March crash levels. So if that’s the case, I think we should see some fading action here, and again, I don’t see strong reasons for a continued upward trending market (yet). I will leave you with this…Earlier, I caught up with a friend who used to trade actively for the last few years.

Me: Bro, are you still trading much?Friend: Not really, since Black Thursday when I got rekt.

More than 2 billion got wiped that day, it was very dark because anyone who possibly had some form of leverage would have been REKT, and memories are still fresh from that capitulation. So tell me how are we going to see a sustaining bull market with momentum here and now with the world struggling with the Coronavirus pandemic? Peace out my friends.

Downtrend channel breached for now, with stop outs driving shorts out… A close above $7k will invalidate this decline… Otherwise, stick to the playbook…

For the past three weeks, everytime BTC moves $500 to $1000 in either direction, neither bulls nor bears could successfully drive a sustained move, trapped in this $6000 to $7400 range…

BTC’s realised volatility has now gone back to pre-March crash days…. So sell on aggravated moves…. Dont chase moves for now…

ETHBTC pair in breakout fashion, with ETH outperforming, possibly on the back of positive ETH headlines….

Jobless claims a number we are all looking out for tonight, with 20 million out of jobs, how are we going to see fresh money chasing Bitcoin?

Disclaimer

Opinions expressed are solely the analyst’s own and do not express the views of Matrixport as a company.

The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

Apr 15: The Future Influencing The Present

Top 10 tokens are all slightly higher in the past 24 hours, clearly underperforming risk assets that continue to surprise me. For example, Amazon making ATH high, Netflix, Tesla and Gold all rebounding sharply. Even the Agricultural bank of China rolling out of their test interface on their mobile for its digital currency didn’t move BTC.

So what’s holding the market down? Besides the pandemic, the other major drive is the backwardation in Bitcoin with futures prices lower than current prices; for example, the June contract’s around 2% lower than current prices. The June contract has turned from contango to backwardation since 5 days ago.

How do we trade today? BTC’s trading in a tight 5% range for the past two days in a downtrend channel on the hourly charts. I expect BTC to continue sliding, and potentially gap down to $6,300. So sell on rallies the theme, and also consider selling $7250 2-days call options for 30+% annualized return. Good luck!

BTC on the 2-hourly downtrend channel with $7k as immediate resistance… Sell rallies?

My eyes on $6,300… I think we will head there… Let’s see how the breakout from this triangle will play out….

BTC shifted from contango to backwardation since April 10….

Stocks associated Chinese digital currency are all rallying today the announcement of ABC news and national blockchain launch today… but not BTC…

Disclaimer:

Opinions expressed are solely the analyst’s own and do not express the views of Matrixport the company.

The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News. Investors should be well aware of the volatility of cryptocurrencies and conduct their own research before making investment decisions.

April 20: Too Many Have Missed the ETH Lining Because They're Expecting BTC

Trading Crypto with Eugene is a series of daily commentary of market analysis and trading advice shared by Eugene Ng of Matrixport, a veteran trader with 10 years of experience in top-tier global investment banks. If you like the article, please follow us here on Blockchain.News so you won’t miss our future publications.

Active weekend for crypto with ETH stealing the limelight up almost 8% while BTC up only 1.5%. The main catalyst for ETH in the past 48 hours was the first block being mined and validated on the ETH 2.0 testnet. Others include record stablecoin volume on ETH, and recent record inflows for Grayscale’s Ethereum trust. But not everything was rosy for the ETH community this weekend as they suffered yet another DeFi attack; US $25mil from DForce’s Lendf.me. For the root causes, refer to this great read here. Binance also announced a new smart contract blockchain designed for high-performance base-layer for DApps, sounds like we have got another ETH competitor.

So how do we trade today? BTC is the beneficiary of the ETH’s powerful weekend rally and I think technicals also support a move higher in the next 24-48 hours. On that point, there is a likelihood we see BTC spiking to a high of $7,800-$8,000 regions should risk assets continue to stay buoyant this week. I’m just holding back from saying “all in” because I’m not confident that there are sufficient dry powder/fresh inflows of capital sustaining the next huge run-up. Will we continue to have ETH-driven broad-based rally? Not sure too. It is during times when I don’t want to risk my entire capital but potentially have exposure to the upside that I’m likely to buy some OTM call options such as BTC $7,500 calls that expire this Friday. Good luck!

Cup & Handle Pattern tends to be bullish continuation patterns so technicals supporting the uptrend narrative…

Larger wedge formation shows potential for $7,800 to $8,000 region if we do see the uptrend technical play out…

ETH in a triangle too… There is a chance we go either direction, but just wanted to highlight to you how far it has rallied since Friday.. more than 25%…

DisclaimerOpinions expressed are solely the analyst’s own and do not express the views of Matrixport the company.The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

April 23: ETH Eating The Stablecoin World

BTC up almost 4% with ETH, XLM and XTZ registering 7-9% of gains in the past 24 hours. Crypto headlines relatively light with continued ETH buzz as a value-transfer platform for stablecoins (previous note I sent about how that has been one of the prevailing narratives in driving ETH’s recent rally; estimated $6 billion in market cap on ETH network). Another observation that it is now evolving into a 24/7 digital eurodollar infrastructure. Technically speaking, ETH to close > $190 for a further bullish confirmation. Stocks rebounded after two days of consecutive losses with oil rebounding and another stimulus $484 billion to be passed later, but I think they’ve forgotten there are jobless claims tonight which is likely to show at least 4 million jobless people. That would basically mean 25 million or more unemployed in the U.S. Coincidentally, for the past few weeks, every Thursday, there has been some sort of “positive catalyst” being announced after the weekly disaster claims number comes out; from the Fed, Trump, Miracle Drug and the Treasury.

Will ETH-inspired rally continue to drive the market? Will oil stabilize despite a fundamental short-term storage environment with a popular flawed ETF product? Will halving next month start getting the market excited? Bottom line: mixed messaging; prices are higher across the board but the volume and open interest continue to dip. Need bulls to push through the interim triangle resistance at $7,250 and the monthly high of $7,474. With the higher low set-up from March-lows, we’re in a constructive long term upwards trend. Having said that, there’s still a bias for short-term weakness or “choppy” sideways trading till we break decisively higher with strong momentum.

Trade of the day? 50/50 today with a small bias for a move lower, and am likely to target and turn long from the region of $6,600-6,700 if it gets there. Good luck!

BTC can move in wave A,B,C pattern if we see constructive bullish momentum into halving, otherwise, we may move into Y, Z pattern i.e. bearish momentum before halving. Updated from last note, I’ve added a channel support that could potentially see BTC hold up….

Will we continue to see BTC follow this “choppy” sideways trading for the next few days?

Triangle resistance and support levels… Key still $7,250 and $6,600 for the bull and bear camp….

S&P 500 e-mini futures big trendline resistance… 2830, will we break and close above? Not too sure….

Tether’s ERC20 transfer count has been growing faster than both BTC and ETH over the last 180 days…. Will this continue to be a trend?

Bio of Eugene: Eugene is currently a sales and business development director for Matrixport. He has 10 years of experience in institutional trading, financial derivatives and sales in Citibank, Barclays Capital and Deutsche bank. Eugene started investing in cryptocurrencies in 2017, and has since advised multiple projects worldwide, raising more than U.S. $50 million. Because of his active involvement in fundraising, Eugene is well-connected with the crypto ecosystem. Beyond advising projects, Eugene takes a keen interest in trading and managing his personal portfolio. He has been featured on Bloomberg, Forbes and Yahoo. DisclaimerOpinions expressed are solely the analyst’s own and do not express the views of Matrixport the company.The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

April 24: CME Bitcoin Traders Saving The Day

BTC led the charge in this rally with gains of over 5% and some standouts including Tezos, Cardano, and Stellar up 11%, 12% and 16% respectively. With U.S. stock market opening quite strongly despite the 4.4mil jobless claims number, BTC seemed well bid throughout the opening with most shorts getting liquidated around $7,500 level. As the April contract settled, May contract started trading at a premium, leaving the term structure back to contango. To put things into perspective, futures were trading mostly in backwardation earlier in the week (please see chart below).

A high of almost $7,800 got the market slightly excited with 17 days left to halvening, the market seemed poised to get back into a bullish frame. It did play to the initial resistance zone of $7800 region (please see chart below). There is reasonable likelihood we see BTC being supported well if equities remain stable given that the underlying macro fundamentals are in place. In my note on Tuesday, I shared that it’s also time to be long volatility given that volatility has softened drastically towards near pre-March crash levels, and I continue to expect volatility to persist ahead of halvening and such uncertain global economic times.

Trade idea for the day, don’t chase. Don’t think we are in the “FOMO” mode yet. Buy on dips between $6,900 to $7,100 region, and hope our $7,500 call option that we put on earlier in the week settles in the money today! Goodluck and have a restful weekend ahead with your family.

BTC touched (A) yesterday and potentially it could drift towards B, or even Y if risk turns ugly. For now, I think it’s a buy on dips between $6,900 to $7,1000.

Dont fight the Cup and Handle pattern… Where to buy? See the bottom uptrend channel.. $6900 to $7100 region…

But S&P futures still refusing for a decisive break higher… still respecting the significant trendline resistance last night…

Futures turning contango for Bitcoin… Market turning bullish, quite a drastic change in sentiment since earlier in the week..

Bio of Eugene: Eugene is currently a sales and business development director for Matrixport. He has 10 years of experience in institutional trading, financial derivatives and sales in Citibank, Barclays Capital and Deutsche bank. Eugene started investing in cryptocurrencies in 2017, and has since advised multiple projects worldwide, raising more than U.S. $50 million. Because of his active involvement in fundraising, Eugene is well-connected with the crypto ecosystem. Beyond advising projects, Eugene takes a keen interest in trading and managing his personal portfolio. He has been featured on Bloomberg, Forbes and Yahoo. DisclaimerOpinions expressed are solely the analyst’s own and do not express the views of Matrixport the company.The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

April 27: Not Out of the Woods Yet

Crypto was quite resilient over the weekend with BTC holding onto its gain and even attempting to break above $7,800 with ETH in similar bullish fashion flirting the $200 mark. Even though twitter-sphere has increasingly been more bullish in the last few days, the recent price rally has been driven by short liquidation. You would notice this as open interest (i.e. outstanding positions) have collapsed from 24 April and hasn’t recovered since. Further, with this uptick, miners may even liquidate some of their BTC ahead of halving.

How do we trade? Stick to the same plan as last Friday, buy BTC around $6,800 to $7,200 region and stay on the sidelines, as this is a massive week for traditional markets (see calendar below). White House Economic Adviser Kevin Hassett told reporters over the weekend that he thinks the next couple of months are going to look terrible with the unemployment rate hitting 16% or higher when April job reports is released. “You’re going to see numbers as bad as anything we’ve ever seen before.”

Second, not sure about the Western world so quickly re-opening is a great idea. For example, Wuhan waited for three consecutive weeks of nearly zero infection before re-opening. Dr Gottlieb also thinks the U.S. isn’t out of the woods yet as the country is still recording more than 30k infections a day. This is why I think prolonged lockdown is going to hurt EPS growth, and puts a big question mark around fresh capital channeling into BTC. Goodluck and have a good week ahead.We are at zone A right now, if BTC cant break above 7,800-7,900 region, we are likely to see it drift towards zone B….

Ignore Twitter’s bullish buzz, BTC’s open interest continues to show decline from 24 April, indicating the recent rally has been driven by shorts getting squeezed out (than fresh capital inflows)…

S&P 500 tends to make new lows with deteriorating EPS growth, and I think EPS will continue to decline over the next few quarters…

Exciting Economic Calendar this week
Apr 28 BOJ Rate AnnouncementApr 28 Riskbank Rate AnnouncementApr 29 FOMC Rate Announcement
Apr 29 US Real GDP (1Q)Apr 30 ECB Rate Announcement

Bio of Eugene:

Eugene is currently a sales and business development director for Matrixport. He has 10 years of experience in institutional trading, financial derivatives and sales in Citibank, Barclays Capital and Deutsche bank. Eugene started investing in cryptocurrencies in 2017, and has since advised multiple projects worldwide, raising more than U.S. $50 million. Because of his active involvement in fundraising, Eugene is well-connected with the crypto ecosystem. Beyond advising projects, Eugene takes a keen interest in trading and managing his personal portfolio. He has been featured on Bloomberg, Forbes and Yahoo.

April 29: Don't Fight the Fed for Now

BTC is up for the past 7-days with Bitcoin and Ethereum hovering right below $7,800 and $200 key short-term levels. While the top two coins are both hesitating for a decisive move higher, Ripple (XRP) has been making a big splash over the past 24 hours up 10%. History has shown that XRP has the ability to trade like that without many headlines or catalysts.

In my previous analysis, I shared that the recent rally has been driven mostly by liquidations of shorts. Another salient driver could be increased spot buying. This is perhaps why futures are mostly trading at a discount to spot. And it isn’t entirely surprising either as leveraged traders in crypto are likely more skeptical after March’s crash. Evidence of spot buying through headlines like this “Grayscale is buying half of all newly minted Ethereum”. In short, the backdrop for a longer-term bull market is constructive, and definitely a healthier rally than the earlier one we had this year.

With today’s spotlight on FOMC and a few large tech (FB, Microsoft) earnings, I suspect risk assets to trade well into, and may potentially sell after “the fact”. So BTC is going to be well bid, and until we close above the 200 DMA at $7,980 with strong volumes, we can test the $8,200 region. With implied volatility quite cheap, tight $300 range over the past five days, halving in 12 days, persistent negative funding, record USD stable coin balances in exchanges and Fed’s “whatever it takes” attitude. It’s hard to argue against such asymmetric risk-reward in the short-term, so I continue to advocate buying on dips around $7,200 region and BTC calls i.e. $8,250 expires in 9 days. Many are puzzled with equities performance; for example, Nasdaq is now almost unchanged year-to-date, this is why you don’t want to fight the Fed. At least, not for now, live, let’s live to fight another day… Good luck!

Two key levels to watch…. $8,200 and $7,200… If we break $8,200 there’s gonna be fireworks, otherwise buy on dips towards $7,200 region…

BTC’s three month implied volatility is cheap compared to its three month realised volatility…. This is why better to buy volatility (i.e. options) ahead of halving…

Equities should be supported in the short run, but how long? Nasdaq uptrend channel intact but lower highs…. You see my point…

Bio of Eugene:

DisclaimerOpinions expressed are solely the analyst’s own and do not express the views of Matrixport the company.

The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

April 30: Will Leveraged $$ Bite Time Time?

Bitcoin heading to the moon today, up almost 20% over the past 24 hours. If you’re new to cryptocurrency, welcome to volatility. BTC has the tendency to breakthrough in an almost “straight-line” gappy price fashion with no news. Even with the worst quarterly GDP print (-4.8%) since 2011, GIlead reported that clinical trials showed coronavirus patients responding to antiviral drug. Markets got excited and continued to get another vote of confidence as market pleaser Fed Chair Powell affirmed that the central bank will put the pedal to the metal to help the economy.

This is why I shared yesterday you don’t want to fight the Fed and especially more so against such asymmetric risk-rewards for higher BTC prices in the short-term. With $8,200 level taken out very decisively on such solid volumes that Coinbase and Kraken had suffered brief outages, it is clear that the bulls have this under control. While I know we are all getting really excited, there seemed to be some shorts liquidation that’s driving the current rally (which I suspect 8-8.2k where levels they got stopped out). At 8k, we have completely reversed the horrific 12 March flash crash, and I think this is the region where algo are switching on to turn net long, where they will be buying on dips.

With positioning still light and some fresh longs in this uptick, there’s room to run if continued capital + leveraged $$ comes back in; so watch $10,500 and $12,000 levels (and how much leveraged $$ FOMO-ing back in), and am gonna be a buyer of 7,900 region in the short term. However, if equities start getting sold off with claims tonight or “reopen to close” narrative starts building, things can swiftly reverse. Another idea is buying some BTC $10,500 calls for 0.023 BTC in 8 days with break-even around $10,500 so you can sleep better at night. Gdluck.

$9,500 should be another level where we can see if Leveraged money will bring this higher… If we break, watch for $10,500 and $12,000 levels… Otherwise, expect a small pull-back towards $7,900 region where you can buy if we do get there…

Open interest on BitMex went down yesterday before heading back higher, so likely that shorts got liquidated near 8k region, and smart/quant money start turning net long…

In a grand scheme of things, open interest hasnt recovered since March crash… and if anything, positioning is still rather light…

Why CME gap at $9,200 may add more smart/quant money to chase longs here…. Constructive if we close above here tonight…

Bio of Eugene:

DisclaimerOpinions expressed are solely the analyst’s own and do not express the views of Matrixport the company.
The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

Bitcoin Is Better Than Gold: Crypto Exchange Coinbase

On May 1, the world’s leading cryptocurrency exchange, Coinbase, published an article claiming Bitcoin to be superior to gold. The crypto exchange had earlier published a similar article where they supported Bitcoin over Gold due to its ease of audit, anonymity, low transaction fee, and ease to be fragmented into smaller fractions. “In the wake of the market meltdown, many investors are pouring their money into gold as a so-called “safe haven”, in the hopes that its value won’t waver like fiat currency. But there isn’t enough physical gold to meet demand right now,” read the Coinbase blog post.

Coinbase highlighted LA Times’ article which described the current gold crisis as ‘historic squeeze’ and said that the news of gold bars being sent from Australia’s Perth Mint to New York to fill in the shortage affirms the fact that Bitcoin’s digital nature and ease of transfer at low cost makes it better than gold in terms of value storage.”The recent challenges of the gold market reveals Bitcoin’s distinct advantage over gold: Bitcoin does not rely on fragile physical supply chains and is truly globally accessible,” stated the Coinbase post.

Coinbase also went on to highlight the difference in the value of gold in the CME’s Comex (New York) Exchange and London Gold Spot market due to hampered supply chain and gold refineries operation due to COVID-19 outbreak. The crypto exchange later pointed out that the Bitcoin algorithm is still working to generate 12.5 Units of Bitcoin in every 10 minutes, thus keeping the supply intact, unlike gold.

“Today, Bitcoin’s rate of new supply is ~3.6% per year and will soon drop to ~1.7% on May 12th, setting it on par with gold’s historic scarcity,” Coinbase wrote.

The blog post also highlighted the return on the investment aspect of Bitcoin and compared it with gold. According to Coinbase, in terms of return in the year 2020, Bitcoin has outperformed gold and S&P 500 where Bitcoin has a +20% return while gold and S&P 500 have +12% and -8% returns respectively as of April 29, 2020.

Image via Shutterstock

May 6: You Snooze You May Not Lose

$9,000 continues to pin Bitcoin down, leaving it to trade in a narrow $300 range for the past 48 hours. Eethereum also rather lackluster, having traded poorly relative to BTC in the last few sessions as halving looms. For those who are unfamiliar with BTC halving, you can check my short write-up. In other news, Telegram withdrawed offers to pay investors with Gram tokens.

With Trump now back to igniting tensions with the Chinese, risk assets continue to trade cautiously. There’s also a debate whether re-opening for the U.S. earlier is better, but reality is nobody knows. Third, covid19 has already mutated, and if it doesn’t subside in the summer, it could further mutate and potentially limit the effectiveness of vaccines. Wave 2 imminent? In such a mixed global macro backdrop, I don’t see the need to FOMO, I may be wrong, but I am happy with my long core BTC positions. If it does retrace with equities, decent levels to get long will be between $8,000 to $7,000 region. Another trade idea that I’ve been pushing is long volatility (BTC volatility has never been this cheap to equities), buy the $9,500 to $10,000 calls that expire on 15 May post halving. Gdluck.

Lower highs, and lower lows, it does not seem like a great technical picture for a breakout higher, but having traded BTC for the past few years, Bitcoin can surprise…. Some levels for you to take note… $9,500 key for upside momentum and below $8,000 is a buy

BTC’s volatility has never been this cheap compared to S&P 500.. Bloomberg had a great write-up on this…

Bio of Eugene:

DisclaimerOpinions expressed are solely the analyst’s own and do not express the views of Matrixport the company.

The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.