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Bitcoin to face an imminent drop by $400; Bull momentum vanishes as weekly chart bleeds red

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Source: Unsplash

Bitcoin’s meteoric surge had everyone believe that it was the start of the bull rally; however, that rally seems to have exhausted the bulls as the price is stuck in a sideways movement.

Short-Term Analysis

The price of Bitcoin is stuck in a sideways movement without any massive dips or surges for over five days, indicating the exhaustion of the bull rally. There is a formation of an ascending channel and the breakout of this channel is bearish.

Source: TradingView

The breakout from this channel, if similar to the previous pattern, could suggest a drop of approximately 10%, which could take the price of Bitcoin to $7,100. However, the drop could be stopped by subsequent resistances at $7,542 and $7,238.

Long Term Analysis

Daily

The daily time frame showed a breakout of the rising wedge, which resulted in a total drop of ~15%. The Relative Strength Index on this time frame shows that it has breached a four-month-old resistance and is headed down, which is a bearish signal.

Source: TradingView

Weekly

Source: TradingView

The weekly time frame for Bitcoin shows the formation of a doji candle, indicating a reversal in the trend. The candle, after the doji, is a red weekly candle that was formed after 5 consecutive weeks of green candles. If the candle after the doji is a red candle, this indicates a reversal in trend. The support for Bitcoin on a weekly time frame can be seen at $5,880.





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Akash is your usual Mechie with an unusual interest in cryptos and day trading, ergo, a full-time writer at AMBCrypto and a part-time novice trader.

Bitcoin

ErisX goes all hands on deck to launch a Bitcoin Futures market

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ErisX goes all-hands on deck to launch a Bitcoin Futures market
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ErisX’s CSO, Matt Trudeau, detailed the company’s four important plans for the future, which includes launching a spot market, to secure a Bit License, DCO, and to launch a futures market.

ErisX currently has a DCM contract, which is a Derivative Contract Market that allows ErisX to run a CFTC-regulated futures exchange. However, ErisX aims to get a DCO [Derivatives Organization], which will effectively allow it to run a CFTC-regulated clearinghouse. A clearinghouse would mean that ErisX can take control of the custody of the assets and clear and settled trades.

The CSO explained the benefit of this, stating,

“There is some efficiency for firms like producers [like mining companies]; if they need to hedge their inventory or need liquidity on a spot market, they could do that conveniently on a single platform. “

Trudeau added that from the “post-trade standpoint” and “the collateral management standpoint,” ErisX would have cash, crypto, and the futures, all stored in their clearinghouse. This would boost efficiency since it would be available for all customers under a single platform. The CSO added,

“… so there is some efficiency in terms of managing collateral, if you don’t have assets on  multiple platforms, it can all be in our clearinghouse.”

Apart from the aforementioned plans, Trudeau added that the crypto-industry needs to mature more and that ErisX plans to make a significant contribution to that. He added,

“The market is professionalizing and we think that in terms of what institutions are expecting from a trading/custody experience, we will bring some of the solutions to the market and that’s really the foundational pieces that they are looking in order to build their businesses on top of us.”

Apart from ErisX, LedgerX has also received a go-sign from the CFTC to settle Bitcoin Futures in Bitcoins. Other exchanges include Intercontinental Exchange’s Bakkt and Seed CX.





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