What Whales and Short-Term Speculators Do

Investors' risk appetite, which caused the growth of stock indices, continued to pull the crypto market with it at the beginning of last week. Bitcoin gained 28% and ethereum gained nearly 40% in just the second half of March. The main cryptocurrency reached the powerful resistance level of $45,000 on the evening of Friday, March 25, for the fifth time since the beginning of the year. It failed to gain a foothold above it the previous four times, the BTC/USD pair rolled back down. This time it seemed that the bulls finally achieved the long-awaited victory: the quotes recorded a local high at a height of $48.156 on March 28. However, after that, the pair hit the 200-day SMA and stopped rising. The most logical explanation for this stop is the strengthening of the dollar at the end of the past week.

At the time of writing, April 01, the flagship cryptocurrency first returned to the $45,000 zone, which turned from resistance to support, and then rebounded to $46,500. The total market capitalization rose to $2.140 trillion ($1.995 trillion a week ago). The Crypto Fear & Greed Index has also grown slightly: from 47 to 50 points.

DataDash CEO Nicholas Merten believes that short-term investors and traders with leverage influence bitcoin volatility, and “whales” influence the growth. “There has been a lot of panic around the macro environment over the past couple of months,” Merten writes. The Fed is raising interest rates... The potential next wave of COVID-19 - all these problems caused pessimism among small investors. At the same time, the “whales”, on the contrary, did not sell cryptocurrency... In fact, we saw how long-term investors continued to either buy more or hold bitcoin.

One such investor was the well-known software developer MicroStrategy. The company has recently received a $205 million loan secured by its own crypto assets. The loan was issued by the American bank Silvergate. The purpose of the loan is to buy bitcoins. According to the Bitcoin Treasuries website, MicroStrategy already owns 125,051 BTC worth nearly $6 billion. And “this loan,” said Michael Saylor, CEO of MicroStrategy, “is an opportunity to strengthen our position as a leader among public companies investing in bitcoin.”

Note that MicroStrategy is not the only company that provides crypto assets as collateral. For this type of loans, Silvergate Bank has a special SEN Leverage program, the total amount of obligations for which has already exceeded $570 million.

Despite numerous macroeconomic and geopolitical challenges, bitcoin is highly likely to enter the second half of a bear market, according to analysts at Glassnode. This is evidenced by the active accumulation of coins in the range of $35,000-42,000 and the absence of significant spending of bitcoins purchased in the Q1 2021. The share of BTC “aged” over a year has grown by 9.4% over the past eight months to close to a record 62.9%. The holders of these coins did not get rid of the asset in the face of two corrections of more than 50% in the last 12 months. The growth rate of this indicator is comparable to the market recovery in 2018-2019. And this may reflect increased investor confidence in bitcoin.

At the same time, analysts at Glassnode warn that the process of bottoming and investor capitulation in a bear market is often lengthy and painful. Therefore, they urge not to rush into ascertaining the end of the bear market. A number of experts believe that a new strong correction to the south is only a matter of time. There are still no drivers for the rapid growth of quotations, and everything depends on the severity of the geopolitical situation and the dynamics of the global economic recovery. The $30,000 level may become the bearish target for the BTC/USD pair.

Peter Brandt, CEO of Factor Trading, calls for caution in optimistic forecasts. This legendary trader tweeted to his 629,400 followers that BTC’s recent move reminded him of April 2019 when the top cryptocurrency bottomed at $3,500, starting the first phase of its bull cycle. However, the expert emphasizes that even a technical breakthrough does not guarantee that the coin will repeat the 2019 rally.

“Charts DO NOT predict the future. The charts DO NOT even offer probabilities. Charts offer opportunities and are useful for risk management in a trading program. Chart patterns can either work, fail, or transform. If laser eyes reappear and BTC stops, be careful,” Brandt warns.

Crypto analyst alias Dave the Wave posted a comment saying that bitcoin is forming a larger ascending triangle on the weekly timeframe and could rise to its all-time high of $69,000.

We noted in the forecast for the last week of March that the position of ethereum is currently slightly better than that of bitcoin. The above growth figures are clear proof of this. Many investors are now buying ETH with BTC. In addition, the community is waiting for the long-awaited update to the ethereum mainnet. The Merge update is approaching rollout following successful testing on the testnet. Before its launch, more than $5.0 billion in ETH tokens had already been withdrawn from circulation as a result of burning. Since the burning reduces the overall supply of ethereum, this positively affects its price, contributing to the altcoin’s rally. Glassnode analysts have found that the volume of ethereum on exchanges has been declining in recent days. The inflow of this altcoin to the trading floors is 20% lower than its outflow, which creates the conditions for the formation of an ETH deficit.

The growth in the value of the coin is observed against the backdrop of the activation of the ten largest ETH addresses. Whales have accumulated up to 23.7% of the total ethereum supply, according to a new report from analytics firm Santiment. And they are not going to dump their assets, preferring to send ETH to offline storage. A similar trend was observed in the first half of 2017, after which we saw the famous altcoin run during the hype five years ago.

And at the end of the review, another piece of advice in our crypto life hacks section. Recall that we talk in it about the most interesting and unexpected ways to make money in this market.

Have you ever wondered what the toilet is for? We will tell you: to mine cryptocurrency! This is exactly what Gabriel Kozak and Dušan Matuska from Slovakia decided. As a result, they created the AmityAge mining farm, which runs on electricity obtained from human and animal waste. Dušan Matushka, said that "their devices run on methane, which is produced during the biodegradation process." Since there is no shortage of such waste in the foreseeable future, BTC mining on their farm is not dependent on rising global energy prices. Moreover, it takes place in an environmentally friendly way using renewable energy sources, which completely removes all claims against this industry.