[Aim Rich Investment Strategy] Will Bitcoin continue to weaken in the short term… Concerns about weakening price momentum


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Aim Rich Cryptocurrency Investment Information (2021.1.21)
<Figure 1=Market trend score as of 14:00 on the 21st (based on 100 points, left)/Market rise/fall intensity (right)/Data=Aim Rich Financial Engineering Research Institute>

◆Cryptocurrency market conditions <weak>

Bitcoin price, which started to decline right after opening, has once dropped $34,000 during the day, but is rebounding again. As the transaction volume of bitcoin decreases, the momentum of price increase is weakening. In particular, as it becomes uncertain whether the bitcoin price can recover to the $40,000 level, it is struggling to maintain the $35,000 support level. Some point out that if the rebound momentum is not found, it could be threatened with a lead of $30,000.

Major altcoins also fell sharply, and Ethereum (ETH), the second-largest cryptocurrency in the market cap as of 14:00 on the 21st, fell to $1278.99 at a time on the cryptocurrency exchange Binance, then fell to $1,310.50 (-4.82%) and market capitalization. The fourth place Polka Dot (DOT) was trading at $16.8174, down 9.45%. However, Ripple, the fifth place in the market cap, is trading at $0.2971, up 0.65%.

As of 14:00 on the 21st, the price of Bitcoin based on CoinMarket Cap is $36,585.81, the 24-hour trading volume is about 66.2 billion dollars, and the market cap is about 6442 billion dollars. The total cryptocurrency market cap is $829.7 billion, and the Bitcoin market cap share is 64.8%.

The total cryptocurrency market capitalization decreased by 3.01% compared to the previous day, and the market cap excluding bitcoin decreased by 3.77% compared to the previous day, making Bitcoin stronger than Altcoin, and bitcoin’s market cap decreased 2.62% compared to the previous day. The market share of the company increased by 0.41% compared to the previous day, indicating that the number of coins in the market as a whole is falling further than the bitcoin price.

<Figure 2=Status of Real-Time Cryptocurrency Market/Data=Aim Rich Financial Engineering Research Institute>

On the other hand, according to the Weiss Crypto Index, the market, which started to decline right after opening, is trying to rebound after forming a trough around 15:00. It was analyzed that the decline of small stocks in particular was large. W50, a cryptocurrency market index including bitcoin, is -2.63%, W50X, a cryptocurrency market index excluding bitcoin, is 3.13%, WLC, a large stock-oriented index, is -2.50%, and WMC, a medium-sized stock-oriented index- 2.97% WSC, an index centered on small stocks, recorded -4.23%.

<Figure 3=Longs/Shorts cumulative trading volume ratio of major exchanges in the past 24 hours/Data=Aim Rich Financial Engineering Research Institute>
<Table 1=Ratio of Longs/Shorts trading volume of major exchanges as of 14:00 on the 21st/Data=Aim Rich Financial Engineering Research Institute>

As of 14 o’clock on the 21st, the ratio of buy:sell cumulative transaction volume for the past 24 hours was 48%:52%, and the sell ratio was high, and as of 14 o’clock, the selling rate was strong in the long/short ratio of each exchange.

At the same time, on the cryptocurrency derivatives exchange BitMEX, the basis of bitcoin futures is around +6.5, and the basis of Ethereum futures is around +1.2. The price of bitcoin futures on the Chicago Merchandise Exchange (CME) is falling. January futures traded at $34,635.0, up $295.0 (-0.84%) compared to the previous day.

◆Main cryptocurrency prices <weak>

As of 14:00 on the 21st, the domestic bitcoin (BTC) price fell 2.11% from the previous day to 3,8492,000 won, Ethereum (ETH) fell 5,28% to 1.453,000 won, and Ripple (XRP) rose 0.31% to 328. Hit the circle. Bitcoin Cash (BCH) fell 3.29% to 534,000 won, Bitcoin SV (BSV) fell 3.55% to 214,350 won, EOS (EOS) fell 0.65% to 3,050 won, and Chainlink (LINK) was compared to the previous day. It is trading at 23,570 won, down 2.40%, Ada (ADA) down 2.17%, 406 won, and Litecoin (LTC) down 3.50% to 16,150 won.

<Figure 4=Upbit BTC/KRW Daily Chart/Data=Trading View>
<Figure 5=Top 10 Coin Price (As of January 21, 14:00)/Image=Coin Market Cap>

At the same time, the global cryptocurrency market price based on CoinMarket Cap is falling among the top 10 stocks by market capitalization as of the last 24 hours, excluding Tether. The international Bitcoin (BTC) price is $34,587.96, down 2.17% from the same time the day before. Ethereum (ETH) fell 4.00% to $1,310.04, while Polkadot (DOT) rose 5.85% to $16.82. Ripple (XRP) rose 0.44% to $0.2979, Cardano (ADA) rose 1.54% to $0.3644, Litecoin (LTC) fell 5.20% to $143.36, Bitcoin Cash (BCH) fell 4.35% to $480.89, Chainlink (LINK) fell 3.25% to $21.18, while Binance Coin (BNB) fell 0.68% to $41.62.

◆ Analysis of major media and market experts <neutral>

Many experts predict that the resolution of the $38,000 and $40,000 resistance levels beyond the valuation burden and continuing sell-offs will be the inflection point for the Bitcoin rally. In this process, the constant inflow of institutional buying tax is key. In addition, they expect that bitcoin trading volume will not increase much in the short term. However, some analysts pointed out that while the volatility of bitcoin is gradually increasing, unlike in the past, the volatility of bitcoin is eventually leading to an upward trend.

(Positive opinion)

① Cryptocurrency investor Dan Tapiero explained that the current volatility of bitcoin suggests that the uptrend of bitcoin is only beginning. As the current price is close to the lowest of the long-term fluctuation range, it is best to keep it.

② Lawrence Summers, a Harvard University professor who served as the US Treasury Secretary, predicted in an interview with Bloomberg TV that “the Bitcoin ecosystem will not collapse and will continue to survive.” When asked media questions about whether Bitcoin is a bubble, he said, “I’m not going to talk about Bitcoin’s volatility in the next six months. But some institutions love Bitcoin. I don’t think all of this will collapse. Price fluctuations are bits.” “It makes the coin look more resilient, and it makes people move. People also take into account the finiteness of the bitcoin supply, which in turn causes the price to rise.”

(Neutral opinion)

① Cryptocurrency analyst filbfilb diagnosed, “Bitcoin price could be trapped in consolidation (flooding) between $30,000 and $38,000.” However, he said, “The whale alert, which tracks the movement of bitcoin whales, started a massive influx of bitcoin whale addresses at $29,314. This will be the level of support for bitcoin in the short and long term.” While the volatility of bitcoin is gradually increasing, unlike in the past, the volatility of bitcoin will eventually lead to an upward trend.”

(Negative opinion)

① As a result of a survey conducted by Deutsche Bank, a global investment bank, for global fund managers, more than half of them expected a decline in the price of Bitcoin. According to the media, they predicted that “the bubble of digital assets including Bitcoin and some technology stocks such as Tesla is serious,” and “the price will drop by more than 50% in the next 12 months.”

② Coinnis special analyst’JIn’s Crypto’ diagnosed, “Bitcoin trading activity is low and volatility is not large at this time. Investors’ transaction costs during the adjustment period are on the rise, so it is not very helpful for price stability.” He continued, “The number of large transactions over 100BTC reached 1,077, hitting a short-term high. Big players are still trading frequently. Accordingly, there is a possibility that Bitcoin will be out of the current price range. In the future, at the bottom of $38,000, It is necessary to pay attention to the movement of the person.”

③ John Trading’s chief market strategist Michael O’Rourke warned, “It could be a risk signal to investors for a company to buy financial assets for speculation purposes, regardless of its core business.”

④ Steve Forbes, the founder of the global media outlet’Forbes’, said, “BTC is receiving reflective profits due to distrust of traditional currencies. Global financial institutions’ further movement of BTC investment portfolio is also accelerating.” However, he said, “However, bitcoin is not a currency. It is not stable. It was a high-end’steak’ today, and it can be turned into’dog food’ tomorrow. A limited supply can also meet the growing economy and market demand. It is questionable whether there will be,” he explained.

◆Comprehensive Analysis of Bitcoin Market Price <Weakness>

Bitcoin’s daily market price (see Figure 5), which technically began to drop from the 5th moving average line to resistance shortly after the opening, was intensified as the intraday US CME Bitcoin futures coincided with the downward trend filling the gap on the day. The buying trend that had flowed in during the rising period disappeared, and the price that had initially converged fell below the moving average line on the 20th, and the center of gravity shifted to a decline, so the bitcoin price gradually turned to a short-term weakness even if it did not drop sharply immediately. Is expected to be.

According to the market analysis data of the Institute, 1) the daily technical indicator is actively buying, 2) the market participants’ investment sentiment is very good, based on the crypto fear and greed index, and 3) the kimchi premium index is stable’buy’ Maintaining the level 4) Same-day payment options The high proportion of call options due to the number of outstanding payment options is a positive factor.

<Figure 6=BTC/USDT (Binance) Daily Price (Based on 14:00 on the 21st)/Chart=Trading View>

However, 1) Bitcoin’s return is gradually decreasing compared to the beginning of the year, 2) On-chain transaction indicators, it is highly likely that the bitcoin price on the same day will close with a volatile movement around $36,000, 3) Close maturity As a result of the analysis of the bitcoin option pending contract, it is expected that the volatility with a considerable amplitude is expected to be significantly greater over time based on $36,000 to 37,000 dollars.

According to the R&D’s market analysis data, it is positive that 1) the kimchi premium index maintains a stable’buy’ level, and 2) the high proportion of call options due to the number of outstanding payment options on the day.

However, 1) the daily technical indicator has turned to’neutral’, 2) the investor sentiment of market participants, seen as a cryptocurrency and greed index, fell below 80 points for the first time since the beginning of November last year, and 3) Bitcoin compared to the beginning of the year There are more negative factors, such as the fact that the rate of return of is gradually lowering, and 4) there is a high possibility of a weakening of the bitcoin price on the day of the on-chain transaction index.

In addition, as a result of the simulation using the bitcoin option data of the near expiration date by the institute, it is predicted that the bitcoin price will move from 35,000 to 36,000 dollars and then decrease to the level of 28,000 dollars as well as increase in price volatility toward the end of the month. It is judged to be necessary.

On the other hand, the intraday variable today is the settlement date of the Bitcoin and Ethereum options on January 21 of the DRBT exchange. Options due today have a lower strike price and less pending contracts than other maturity dates, so the impact on the market is expected to be somewhat less, but as a result of analyzing the proportion of all open contracts of Bitcoin options by Delibit (DBT) by time ( See Figure 16), as the proportion of call option sales accounted for 2/3, the seller’s involvement seems to have been severe.

However, since the estimated price of the Delibit Bitcoin option payment (see Figure 17), which is due on the same day as simulated at 14:00, is expected to be around $35,000, there is a possibility that it will rebound to at least $35,000 around 5 pm after confirming the low. It is high, so please refer to this point and check the rebound flow of other coins.

Binance BTC/USDT, calculated by the institute’s quant program, has an important price change on the day of $35,094 (pink line), and the current price is below this, so the price 1) breaks from the previous day’s low and recovers , 2) If it rebounds with the bottom of the pair without breaking from the previous day’s low price, and 2) it can buy if it recovers to $35,094.

However, if it declines while maintaining its weakness, it is necessary to check whether the low price was broken the previous day. For more detailed analysis based on market data, see ‘7. Please refer to the’Quantitative Analysis’ section.

◆Technical analysis <neutral>

As of 14 o’clock on the 21st, the technical analysis of the daily price movement of Bitcoin on Upbit, a domestic cryptocurrency exchange, and Binance, a foreign exchange, were all found to be’neutral’. Looking at the detailed evaluation items, 2 of the oscillator indicators of Upbit came out of’Buy’, 5’Sell’, and 1’Neutral’ opinion and’Strong Buy’ opinion, and the moving average indicator is’Buy’ and 7 It was summarized as a’buy’ opinion with five’sell’.

<Figure 7=Upbit: BTC/KRW (Daily) Technical Analysis Summary Table/Data=Investing.com>

If you look at the detailed items of Binance, two of the oscillator indicators are’Buy’, 5’Sell’, and 1’Neutral’, sending a’Sell’ signal, and the moving average indicator is’Buy’ with 7 and’Sell’. ‘Sell’ was summarized as’Buy’ with five.

<Figure 8=Binance: BTC/USDT (Daily) Technical Analysis Summary Table/Data=Investing.com>

◆Quantitative analysis

◇Crypto Fear & Greed Index <Weakness>

The’Fear and Greed Index’ provided by the cryptocurrency data provider Alternative.me is 75 points, down 3 points from the previous day, and has been down one step from the extreme greed stage of the previous day to the greed stage. Since then, it recorded the lowest level, indicating that investment sentiment has deteriorated. The index closer to 0 indicates extreme fear in the market, and closer to 100 indicates extreme optimism.

<Figure 9=Crypto Fear and Greed Index (Top) and Daily Trend (Bottom)/Data = Alternative.Me>

◇Comparison of return by asset compared to the beginning of the year (%) (as of 14:00 on January 21) <weak>

Despite the decline in the dollar index over the past two days, the US CME’s Bitcoin futures’ yield compared to the beginning of the year was 11.05%, down 1.87% from the previous Tuesday, while oil futures, which had been on the rise since the beginning of the year, rose 1.13%. It has exceeded the rate of return of the coin.

The previous day, the US stock market ended higher with President Biden taking office. Both the NASDAQ and the S&P 500 recorded all-time highs. As government bond yields fall, the government’s stimulus and low interest rates are expected to remain for some time. It is positive that the number of new coronavirus cases in the United States has decreased to less than 200,000. Meanwhile, gold and oil prices ended higher on the previous day due to a weak dollar and expectations of stimulus measures.

<Table 2=Status of increase/decrease in return by asset category/Data=Chicago Commercial Exchange, USA>
<Figure 10=Year Earnings Trend by Asset Category/Data=Trading View>

◇Comparison of yield by cryptocurrency compared to the beginning of the year (%) (As of January 21, 14:00) <Weakness>

As the cryptocurrency market enters the adjustment period, the overall rate of return is lowering compared to the beginning of the year. As of 14:00 on the 21st, Stellar (XLM) ranked 1st with 118.79% at the beginning of the year as of 14:00 on the 21st, Cardano (ADA) ranked 2nd with 110.57%, and Polkadot (DOT) ranked 3rd with 108.29%. Ethereum (ETH) ranked 4th with 81.90% and Chainlink (LINK) 5th with 81.42%.

<Figure 11=Ranking of the top 10 cryptocurrencies by market cap compared to the beginning of the year/Data=Trading View>

◇Bitcoin on-chain indicator analysis

① Analysis of Bitcoin transaction volume on the day <weak>

Analyzing the trading volume of BTC/USD’s on-chain data on the same day makes it easy to check the direction of the bitcoin market and respond to it. Indicator 1 in Figure 11 shows the spot trading volume of BTCUSD or BTCUSDT on 9 major exchanges (Binance, Bitfinex, PoloniX, Bitex, Coinbase, Bitstamp, Kraken, HitbittyC, Gemini), and number 2. The indicator is by summing the trading volumes of BTCUSD or XBTUSD indefinite futures from 7 derivative exchanges (Binance Futures, OKX Futures, OKX Futures, Huobi Futures, FTX Futures, Kraken Futures, Delibit, BitMEX) in real time. Show.

<Figure 12=Comparison of total BTC spot trading volume and total BTC derivatives trading volume of major exchanges/Data=Aim Rich Financial Engineering Research Institute>

Bitcoin prices are converging to the lower $35,000. Looking at Index 1 in Figure 13, the spot trading volume continues to decline along with the market price decline, and today’s trading volume is higher than the previous day. However, if you look at the indicator in Figure 14, the total selling quantity is higher than the total buying quantity, so the bitcoin price is falling as of 14:00 on the 21st. In addition, although index 2 in Figure 13 shows that there is not much futures trading volume, daily price volatility is increasing a lot, so it seems to be cautious of the possibility of a sharp fluctuation during the intraday.

<Figure 13=Comparison of total daily BTC purchases and total sales of major exchanges/Data=Aim Rich Financial Engineering Research Institute>

② Bitcoin price and Korea premium index trend analysis <Neutral>

It is interesting to compare this trend after drawing the difference between the price of bitcoin listed on the domestic and foreign exchanges (hereinafter referred to as Kimchi Premium Index) on the bitcoin price chart. In the period of price increase, the bitcoin price is higher than the kimchi premium index, and in the period of price decline, the bitcoin price is lower than the kimchi premium index.

Although the prices of Bitcoin and Ethereum have fallen, the trend of Ethereum is still rising. However, both prices of kimchi premium indices rose above ‘0’ and the warning lights lit up. It is okay to keep buying, but it is necessary to observe that it does not cross.

<Figure 14=Bitcoin Price and Bitcoin Kimchi Premium Index Trend Comparison/Data=CryptoQuant>
<Figure 15=Ethereum Price and Bitcoin Kimchi Premium Index Trend Comparison/Data=CryptoQuant>

◇Analysis of the proportion of non-settled bitcoin options on the day <Neutral>

If you look at the result of analyzing the proportion of all outstanding contracts of Bitcoin options of Delibit (DBT) by hour on the 21st (see Figure 16), comparing the data analyzed at 10:00 and 14:00, calls in the open contract of the option due on the day Although the proportion of options remains at a higher level (approximately 63%) than put options, the share of selling call options is expected to exceed 2/3, resulting in a significant drop in intraday.

However, since the estimated price of the Delibit Bitcoin option payment (see Figure 17), which is due on the same day as simulated at 14:00, is expected to be around $35,000, there is a possibility that it will rebound to at least $35,000 around 5 pm after confirming the low. It is high, so please refer to this point and check the rebound flow of other coins.

<Figure 16=Analysis of all bitcoin options outstanding contracts issued by Deribit as of 10:00 (upper) and 14:00 (lower) on the 21st = Data/Data = Aimrich Financial Engineering Research Institute>
<Figure 17=Deribit (DRBT) BTC Option Simulation Result of Expected Water Settlement Price on January 21 (at 14:00)/Data = Aim Rich Financial Engineering Research Institute>

◇Bitcoin short-term price forecast according to bitcoin option data <weak>

It is known that in the cryptocurrency option market, the price of the underlying asset for the option’s expiration settlement tends to shift to the price that causes the most options to lose value by moving to the Max Pain Price. In other words, this price refers to the strike price with the largest number of call and put options, and the price that can incur financial losses to the largest number of option buyers at expiration.

As of 14 o’clock on the 21st, the maximum pain price for option buyers for each option is $35,000 on January 21 and $36,000 on January 22, which is not far from the current price range. It is expected to drop sharply to $28,000, and the up and down amplitude is expected to increase as well.

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