UBS sees gold as an attractive geopolitical hedge and portfolio diversifier, rating the metal as most preferred in its investment lessons for the second half of the year report. The bank highlights strong market performance driven by AI investment and recommends diversified portfolios across various assets, regions, and sectors to navigate political and economic uncertainties. […]
Bitcoin News
Bitcoin Analyst Claims BTC Consolidation Will Continue, Hedge Funds Throw In The Towel
Bitcoin is trending lower at spot rates, sliding away from all-time highs. Looking at the performance in the daily chart, it looks like bears are stepping up, following the general inactivity in an overwhelmingly bearish trend. When writing, the coin is down 10% from March 2024 highs but steady.
Will Bitcoin Consolidate For Two More Months?
Taking to X, one analyst argued that the current state of affairs will likely continue in the days ahead. While most experts predicted Bitcoin prices to rebound sharply, even breaching all-time highs and race to 0,000 after the all-important Halving event on April 20, bears have had the upper hand.
So far, the coin is stuck in a broad horizontal range with caps at around ,000 on the upper end and ,500, registered in May. Technically, the uptrend remains from a top-down preview following the welcomed push higher in Q1 2024.
However, even as traders expect more gains in the days ahead, the analyst said prices will likely stagnate in the next few trading weeks.
When the network halved network rewards in 2020, the analyst notes that the coin moved sideways for 150 days, with prices capped between ,000 and ,000. Currently, the sideways consolidation, the analyst added, has been for 90 days, nearly halfway through the last cycle.
If this guides, prices could continue moving sideways for the next two months, even dumping below the key support levels.
Thus far, Bitcoin bear bars are banding along the lower BB, pointing to intense selling momentum. At the same time, the divergence between the middle and lower BB points to rising volatility, swinging in favor of sellers.
Crypto Hedge Funds Reducing BTC Exposure As Whales Sell Via OTC
Currently, macroeconomic factors and on-chain data paint a cause for concern. One analyst observed that more crypto hedge funds have reduced their BTC exposure, indicating a loss of confidence.
Over the past 20 trading days, the analyst claims that crypto hedge funds have slashed their Bitcoin market exposure to 0.37, the lowest level since October 2020.
While crypto hedge funds reduce exposure, another analyst said inflow to over-the-counter (OTC) desks has risen since Halving.
This suggests that miners or big institutions are offloading BTC away from exchanges. On-chain data shows that OTC balances rose by 62,000 BTC, one of the largest 30-day recorded changes since 2017.
Mexican Billionaire Ricardo Salinas Doubles Down on Bitcoin, Advises Using It as Inflation Hedge
Ricardo Salinas, the third wealthiest man in Mexico, has recently doubled down on his proposal to use Bitcoin as a reserve asset. On social media, Salinas defended the role of Bitcoin as an inflation hedge, commenting on a post that presented inflation as a hidden tax on fiat money and advised his followers to purchase […]
Bitcoin News
Hedge Funds Heavily Betting For Bitcoin To Fall: Will This Strategy Fail?
Looking at the formation in the daily chart, there is no relief for Bitcoin at spot rates. Following the flash crash on June 6, prices reversed sharply from the ,000 level, further highlighting the significance of the liquidation level.
In the past, Bitcoin prices have recoiled from this level, with analysts expecting a short squeeze to print once this line is breached.
Hedge Funds Are Short Selling Bitcoin Futures: Will This Strategy Backfire?
Amid this slip, one analyst on X notes that hedge funds and Wall Street firms have increasingly taken short positions on Bitcoin futures contracts, expecting BTC prices to plunge.
Though they could be net long on the spot market, taking advantage of the fee differential, the trader notes that this strategy is risky. If anything, massive losses could occur should prices unexpectedly spike.
Between the current price point and slightly above all-time highs at ,000, exchange data and trader notes show billion worth of short positions on BTC futures.
This move means that hedge funds are net bearish, and since everyone knows the big boys of Wall Street are shorting, this move could backfire spectacularly.
Even so, hedge funds selling BTC futures are nothing new. Often, hedge funds tend to short the futures of a given product and simultaneously buy the spot markets, taking advantage of the carry trade to profit.
The problem is that this hedging tactic is popular in traditional finance and has been profitable before. On the other hand, Bitcoin is a new asset class that is outside the traditional finance system.
Accordingly, the strategy might not pan out exactly as expected, leading to massive losses.
BTC Fragile But Spot ETF Issuers On A Buying Spree
Whether Bitcoin will recover from spot rates remains to be seen. As it is, BTC is under immense selling pressure, dropping from ,000.
Although the uptrend remains, buyers are yet to reverse the June 6 losses, meaning the path of least resistance in the short term is southwards. A break below ,000 would completely wipe out gains of May 20, signaling a trend shift.
Still, buyers are upbeat about what lies ahead. Last week, despite the contraction, all spot Bitcoin exchange-traded fund (ETF) issuers in the United States have been on a buying spree.
According to HODL15 Capital, in the first week of June, they added 25,729 Bitcoin. This stash is equivalent to roughly two months’ worth of mined coins and is the highest weekly buying activity since mid-March. Then, BTC rose to all-time highs of around ,800.
Bitcoin Hedge Fund Shorts Reach New High Amid Price Fluctuations
Amid Friday’s downturn, following bitcoin’s decline to ,450, the latest Commitments of Traders (COT) report from the Commodity Futures Trading Commission (CFTC) indicates that hedge funds are placing substantial bets against bitcoin. Bitcoin Faces Bearish Sentiment From Hedge Funds While crypto enthusiasts and analysts have been optimistic about bitcoin (BTC) for quite some time, particularly […]
Bitcoin News
Best Long-Term Bitcoin Buy Signal Flashes, Hedge Fund CEO Warns
In his latest dispatch, Charles Edwards, CEO of the Bitcoin and digital asset hedge fund Capriole, has flagged a significant market indicator in the latest edition of the firm’s newsletter, Update #51. Edwards points to the activation of the “Hash Ribbons” buy signal, a notable event that has historically indicated prime buying opportunities for Bitcoin.
Bitcoin Hash Ribbons Flash Buy Signal
The Hash Ribbons indicator, first introduced in 2019, utilizes mining data to predict long-term buying opportunities based on miners’ economic pressures. The signal arises from the convergence of short-term and long-term moving averages of Bitcoin’s hash rate, specifically when the 30-day moving average falls below the 60-day. According to Edwards, this event has “in the vast majority of cases synced with broader Bitcoin market weakness, price volatility and significantly long-term value opportunities.”
The current Miner Capitulation, as highlighted by Edwards, began two weeks ago and coincides with post-halving adjustments in the mining sector. This period often leads to the shuttering of operations and even bankruptcies among less efficient miners. Edwards notes, “Just as we are seeing today, these mining rigs will typically then be phased out over several weeks following the Halving resulting in falling hash rates.”
Despite the historical profitability of miners, especially with increased block fees from new applications such as Ordinals and Runes, Edwards suggests that the market should not overlook the current opportunity signaled by the latest Miner Capitulation. “While this capitulation is occurring when miners have broadly been profitable, we would be remiss not to note this rare opportunity,” stated Edwards.
The Hash Ribbons have not been without their critics, with each occurrence stirring debate about the current relevance and accuracy of the signal. Edwards addressed these criticisms by referencing the previous year’s signal, which correlated with Bitcoin trading in the ,000 range, reinforcing the indicator’s predictive strength. “Every occurrence brings some debate about their relevance today, or why the current signal perhaps doesn’t count,” Edwards explained.
Edwards recommends that the safest approach to leveraging the Hash Ribbons is by waiting for confirmation through renewed hash rate growth and a positive price trend. He concludes, “The safest (lowest volatility opportunity) to allocate to the Hash Ribbons strategy is on confirmation of the Hash Ribbon Buy which is triggered by renewed Hash Rate growth (30DMA>60DMA) and a positive price trend (as defined by the 10DMA>20DMA of price).”
Broader Market Context
Transitioning from the technical to the contextual, Edwards discusses the changing regulatory landscape that has recently become more favorable to cryptocurrencies. The SEC’s approval of an Ethereum ETF, categorizing ETH as a commodity, marks a significant shift in the regulatory approach towards cryptocurrencies and reflects growing institutional acceptance.
“The reclassification of Ethereum and the approval of its ETF represent a pivotal shift in governmental stance on cryptocurrencies,” Edwards notes. “This could lead to increased institutional involvement and potentially more stability in the crypto markets.”
Furthermore, Edwards points to macroeconomic factors that could influence Bitcoin’s value. The expansion of the M2 money supply and the Federal Reserve’s stance on interest rates are designed to stimulate economic activity. However, Edwards warns of the potential long-term consequences of these policies, such as inflation, which could enhance Bitcoin’s appeal as a hedge against monetary devaluation.
“Bitcoin was conceptualized as an alternative to traditional financial systems in times of economic stress,” Edwards remarks. “The current economic policies reinforce the fundamental reasons for Bitcoin’s existence and could lead to increased adoption.”
On the technical front, Edwards provides an analysis of Bitcoin’s price movements, highlighting the recent breakout and consolidation above critical resistance levels. He sets a conditional mid-term price target of 0,000, contingent upon the market sustaining its current momentum and the monthly close remaining above a critical threshold of ,000.
At press time, BTC traded at ,008.
Hedge Funds Adopt Net Short Positions on BTC and ETH Futures, Kaiko Analysis Reveals
In a recent analysis by Kaiko, it has been found that hedge funds are currently holding net short positions on bitcoin (BTC) and ether (ETH) futures. This strategic move reflects a cautious stance amid fluctuating market dynamics and speculative trading activities. Study Shows Hedge Funds’ Net Short Positions in Bitcoin and Ether Futures Amid Market […]
Bitcoin News
Hedge Funds Fall For The Memecoin Frenzy: “Mind-Boggling” Returns Tempt Financial Giants
In a recent Bloomberg report, it has come to light that the hedge fund industry is increasingly drawn to the allure of the memecoin sector, given the recent price increases and substantial profits that surpass those of Bitcoin (BTC) or the largest altcoins in the market.
Memecoin Mania
One example of the appeal of memecoins to traditional finance institutions is Newport Beach-based Stratos, which launched a liquid fund with the Dogwifhat token in December.
The Solana-based memecoin Dogwifhat, known for its mascot – a beanie-wearing dog – became a major player in the crypto world, with its price increasing more than 300 times.
This substantial spike reportedly helped Stratos achieve a staggering 137% return in the first quarter of 2024, outperforming gains in the broader crypto market. However, Dogwifhat has since retraced more than 35% from its March 31 all-time high (ATH) of .83 and is currently trading at .09.
Interestingly, Stratos is not alone in venturing into memecoins; other hedge funds are also doing so.
Asset manager Brevan Howard, for instance, has reportedly made a “tiny” investment in memecoins. Pantera Capital, a crypto fund, recently emphasized the staying power of memecoins and the “enormous” trading opportunities they present.
Is It Just Gambling?
Despite the enthusiasm from some hedge funds, the report notes that many crypto participants remain skeptical of memecoins.
Quinn Thompson, the founder of Lekker Capital, a hedge fund experimenting with trading memecoins, likened the current frenzy to the speculative fervor seen in traditional markets with stocks like GameStop.
In addition, Thompson described memecoins as the “tip of the spear for speculation” and emphasized the “gambling-like” nature of their trading.
Still, Cosmo Jiang, a portfolio manager at Pantera Capital, noted the evolution of memecoins beyond mere jokes, calling some “culture coins” that symbolize membership in a particular group or belief system.
The report notes that the ease of creating and launching memecoins has increased with the availability of apps like Pump.fun, which allow users to mint coins in minutes. Blockchains like Solana and Coinbase’s Base, which offer low trading fees, have been flooded with these tokens.
In light of these developments, Josh de Vos, research lead at CCData, highlighted the improved infrastructure supporting memecoins, including increased liquidity and the development of advanced futures markets on centralized exchanges (CEX).
As more hedge funds take memecoins seriously, Rennick Palley of Stratos anticipates a growing focus on these crypto assets.
Drawing parallels to the initial skepticism surrounding cryptocurrencies, Palley suggests that meme-only funds may emerge, mirroring the creation of non-fungible token (NFT) funds.
To further demonstrate the interest and adoption of these emerging tokens, in the first quarter of 2024, memecoins emerged as the most profitable crypto narrative, delivering massive average returns of 1312.6% across its top tokens, according to a recent study conducted by CoinGecko.
Currently, the largest memecoin on the market, Dogecoin (DOGE), is trading at .1616, up 5% in the last seven days. It has a market cap of billion.
Featured image from Shutterstock, chart from TradingView.com
Skybridge Founder: It Pays to Be Long Bitcoin — BTC Will Be Inflation Hedge and Store of Value as It Scales
Skybridge Capital founder Anthony Scaramucci firmly believes that bitcoin will be both an inflation hedge and a store of value as the cryptocurrency scales. He emphasized that bitcoin is “still an early stage technical asset that will trade like other risk assets until it exceeds a billion users.” Scaramucci Doubles Down on Bitcoin as Inflation […]
Bitcoin News
Ark CEO Cathie Wood Sees Bitcoin as a Hedge Against Currency Devaluations and Rogue Regimes
Ark Invest CEO Cathie Wood sees bitcoin as a hedge against currency devaluations and wealth erosion. “I think this is an insurance policy against rogue regimes or against just horrible fiscal and monetary policies,” she explained, attributing the recent bitcoin price surge to a “flight to safety.” ‘I Think This Is a Flight to Safety’ […]
Bitcoin News