Bitcoin Forms a Bull Flag But BitMEX Open Interest Approaching Critical Level
- Bitcoin moving above 200 DMA is a “positive milestone and reinforcing 2020 shaping up to be great year for BTC,” – says Tom Lee
- Whenever this has happened, BTC jumps to 80%
- Meanwhile, Mid/larger altscoins separating from low-cap altcoins and trailing BTC
Since surging to $9,450 on Tuesday, Bitcoin's price has stuck around $9,300. This has the trading volume falling from $1.3 billion to $775 million on top ten exchanges with real volume.
The good thing is the world’s leading cryptocurrency has moved back above 200-day moving average on Jan. 27. This Bitcoin bull, Fundtsrtat’s Tom Lee sees it as a “positive milestone and reinforcing 2020 shaping up to be great year for BTC.”
200 DMA is seen as a good indicator of the long term trend and viewed as an upward trending market.
Lee also pointed out that whenever Bitcoin has gone above its 200 DMA has resulted in a jump of 80%, meaning the price could climb to above $16,000.
“Whenever BTC >200D, win-rate (6M forward) jumps to 80% and essentially “re-entering” bull market (>200D),” said Lee.
Mati Greenspan, founder of Quantum Economics also pointed towards a bull flag forming on the Bitcoin price chart. A bull flag pattern occurs when an asset is in a strong uptrend.
Alright folks!! Who can name this classic pattern?! pic.twitter.com/RGxoOLDP8m
— Mati Greenspan [tweets are not trading advice] (@MatiGreenspan) January 30, 2020
However, the open interest on crypto derivatives exchange BitMEX’s XBTUSD is approaching a crucial level yet again. Today, it is approaching the physiological $1 billion market yet again that previously led for it to instantly drop and BTC price to plunge as well.
BitMEX XBTUSD Open Interest is the most screenshotted chart on https://t.co/0KkntYiyQp
Today it is approaching the psychological $1bln mark pic.twitter.com/KV2zoTjXG1
— skew (@skewdotcom) January 30, 2020
“SHIT index trailing BTC”
Meanwhile, in tandem with the flagship cryptocurrency, mid-cap cryptocurrencies are also enjoying a bullish start to the year which is already up more than 70% in 2020. The mid-cap index is driven by Dash, Ethereum Classic (ETC), Zcash (ZEC), and Bitcoin Gold (BTG), all of which are up over 100%.
“Mid/larger alts have been separating from low-cap shitcoins. SHIT index trailing BTC,” points out analyst Ceteris Paribus.
Mid-caps keep at it, index up >70% to start the year.
— Ceteris Paribus IS RIGHT (@ceterispar1bus) January 30, 2020
Things that are good for Bitcoin
Bitcoin detractor and gold proponent Peter Schiff however, is not feeling good about the ongoing price movement that has BTC up 27.90% YTD. Schiff said,
“Whenever there's actual safe haven demand, Bitcoin pumpers manipulate the price higher to attract buyers, driving the false narrative that Bitcoin is a safe haven too. Buyers speculate that others will buy Bitcoin as a safe haven, but none do. There's nothing safe about Bitcoin.”
Recently, Bitcoiners turned economist’s tweets into memorabilia after his password crisis. Back in July 2019, the Bitcoin community gifted him thousands of BTC who was appalled when he lost his coin due to a password error. But it was that he failed to set up the wallet properly.
The Fed's low interest rate policy is forcing savers to save #gold rather than fiat, or to speculate in over-priced financial assets. The result is less savings available to finance capital investment. So the Fed's war on savings is also a war on economic growth and prosperity.
— Peter Schiff (@PeterSchiff) January 29, 2020
Fed’s decision regarding interest rates is not only good for yellow metal but also for Bitcoin as Paribus ticks off the reasons including easy monetary policy, global expansion, increasing wealth for Millennials & Gen Z's, institutional infrastructure development, improving custody solutions, and UX improvements.
However, nuclear wars and pandemic are bad for Bitcoin, he said.