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Crypto Long & Short: Finding Alpha in AI-Related Crypto

Glenn Williams Jr. explains how his process of researching small and microcap oil and gas companies compares to that of digital assets and AI. Then, Joe Orsini shares how two on-chain metrics, realized capitalization and holding trends, demonstrate belief in bitcoin as a store of value (SoV).

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Bitcoin & The Global Currency Meltdown | BTCUSD September 28, 2022

In this episode of NewsBTC’s daily technical analysis videos, we examine how Bitcoin is trading against other currency pairs and not USD. We also look at BTC against WTI Crude Oil and the S&P 500.

Take a look at the video below:

VIDEO: Bitcoin Price Analysis (BTCUSD): September 28, 2022

The market continues to be shaken up by the strength of the dollar. Following yesterday’s rally in BTC that was immediately wiped out, traders are even more hesitant to pull the trigger with the top cryptocurrency rising again.

Bitcoin Daily Momentum Change Causes Chain Reaction

Bitcoin daily has flipped bullish on the LMACD, setting off a chain reaction across a variety of timeframes. In terms of this chain reaction, we have a bullish crossover on the 3-day and the weekly timeframe. Both, especially the weekly, have been like bait, snapping back at bulls each time they attempt to turn the tides of momentum.

 

Momentum causes a bullish chain reaction of crossovers | Source: BTCUSD on TradingView.com
How BTC Fares Against Other World Currencies

The DXY Dollar Currency Index is the dollar trading against a weighted basket of top national currencies. These currencies include the British pound sterling, the euro, the Canadian dollar, Japanese yen, Swedish krona, and Swiss franc.

Due to the enormous shakeup and volatility in global currency markets, we put Bitcoin up against other currencies and not the standard USD pair.

As you can see, the pound, euro, canadian dollar, and Japanese yen all crossed bullish weeks prior, while the USD pair struggles to do so. Other strong national currencies like the Swedish krona and Swiss franc have yet to cross over much like the dollar. 

Bitcoin could be bottoming against several top currencies | Source: BTCUSD on TradingView.com

Related Reading: Bitcoin Shows Resilience In Dollar-Driven Bloodbath | BTCUSD September 26, 2022

Comparing The Top Crypto To The S&P 500 And WTI Crude Oil

Continuing the deep dive into unorthodox Bitcoin charts, we’ve combined the charts of BTCUSD and the SPX. This unique chart shows that Bitcoin never made a higher high in late 2021, and the downtrend began with the April peak. This chart also is flipping bullish and has a weekly close confirming the crossover.  Bullish momentum will need to grow to sustain a rally.

Next, we’ve compared Bitcoin to what could be the most important macro asset globally: oil. In this comparison, much like the SPX example, we put BTCUSD up against WTI Crude Oil. WTI Crude oil is American produced oil from West Texas Intermediate. 

In this oddball trading pair, Bitcoin also had a lower high and a much steeper downtrend. However, Bitcoin flipped bullish against oil several weeks ago, but has yet to produce a meaningful upside move. Is such a move coming soon enough?

Bitcoin has crossed bullish against the SPX and WTI Crude Oil | Source: BTCUSD on TradingView.com

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Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

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Coinbase Shows Crypto Market Performing Similar To Other Traditional Markets

Crypto coins exhibited exponential growth through the years, raising attention to the crypto space. There was no correlation between crypto performance and the conventional stocks of different commodities. However, all that seems to be fading into thin air from the recent activities and trends of digital assets.

The chief economist of Coinbase, a crypto exchange, has reported a change in the risk profile of crypto assets. According to the analysis from Cesare Fracassi, crypto performance is similar to those of stock commodities. This means that prices of crypto assets now share the same trend as stocks like pharmaceutical, oil and gas, tech, etc.

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Fracassi gave his observation on July 6 through a blog post. He stressed the 2020 global pandemic marked the increase of the correlation between the prices of digital assets and stock. In his explanation, Fracassi cited that Bitcoin returns gave more significant proof for the similarities in the trend.

According to his argument, the average BTC returns over the past decade have shown no correlation to stock market performance. However, the trend twisted from the onset of the COVID pandemic.

In Fracassi’s analysis, the current market movements are taking along crypto assets. Hence, cryptocurrency price trends and risk profiles are no longer separate from the flow within the overall financial system.

Crypto Volatility Shows Similarities to Commodity Stocks

In support of his explanation, Fracassi pointed out Coinbase’s May report highlighting the volatility trend for BTC and Ether. According to the monthly insight report, the two leading cryptocurrencies show a daily swing between 4% and 5%. Such fluctuations indicate similarities to commodities like natural gas and oil.

Suggested Reading | ATOM Rises To Multi-Week High, Daily RSI Shows Bullish Pattern

Further observation showed that the natural precious metals gold and silver showed a daily volatility range of 1% to 2%. These values are far lower risk profile than Bitcoin, the digital gold.

Fracassi’s argument stated that digital assets should receive exposure to macro-economic forces obtainable in the financial system. He reasoned that such action would move cryptocurrency since they are correlated to the general system in risk profiles.

The economist analyzed market cap and volatility with additional comparisons of crypto tokens with commodities. He linked Ethereum and Lucid (LCID), an electric car manufacturer, and Moderna (MRNA), a pharmaceutical firm. On the part of Bitcoin, he linked it to Tesla (TSLA), the electric car manufacturer.

The economist mentioned that the current crypto bear market has contributed to these similarities. But, according to his analysis, two-thirds are linked to macro factors like hovering economic recession and inflation. The other one-third is linked to the ordinary weakening outlook attributed to cryptocurrency.

Cryptocurrency market surges on the daily chart | Source: Crypto Total Market Cap on TradingView.com

Some experts and analysts share the opinion that the role of macro factors in the declining crypto market is a plus for the industry.

Featured image from BBC, chart from TradingView.com

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Hall Of Fame Investor: Bitcoin Is In A “Bear Market”

Hall of Fame investor Richard Bernstein has warned that bitcoin is in a bear market. Richard is the CEO and CIO of Richard Bernstein Advisors. A management fund that manages $4.7 billion and provides investment advisory services to over 10,000 clients.

On Monday on CNBC’s Trading Nation, Bernstein was a guest where he talked about bull markets.  Bitcoin has been in a bull market for the better part of a year now. And even though the asset has surged upwards in that time, Bernstein suggests that this trend is not sustainable.

He said that people were leaving behind the assets that have been positioned to make a profit. Going after cryptocurrencies which he said was “pretty wild.”

Bitcoin Is A Bubble

Calling out the digital asset, CEO Richard Bernstein has said that the asset is a bubble. He states that the asset is currently in a bear market but everyone is ignoring the assets that are actually in a bull market.

The real bull market is actually in oil but everyone is ignoring the market. There’s not a lot being said about it despite the asset being up 42%.

Related Reading | Why Bitcoin Is Actually “Bad For Crime” Contrary To Belief

Pointing to the stock markets,  he said, “Bitcoin is in a bear market and everyone loves its assets. And oil was in a bull market and it’s basically, you’ve never hear of it. People don’t care.

Bernstein has been on Wall Street for years and he called oil the most neglected bull market. Explaining that the major bull market was actually going on in commodities, not cryptocurrencies. The CEO believes that the rush to own cryptocurrencies has led to a major parabola.

“The bubble is different from speculation in that it pervades society,” he said. “It’s out of the financial markets.” Expanding on this by calling out that cryptocurrencies and other tech stocks are now being discussed at places like cocktail parties

Bernstein On How This Can Affect Your Portfolio

Pointing out what he thinks the source of growth is, Bernstein believes the source of growth ultimately lies in energy and material and industry.

According to the CEO, you want to be on the winning team. And the winning team according to him has always been in the energy sector.

Related Reading | Mexican Billionaire Reveals He Put 10% of His Portfolio in Bitcoin

“If you’re on the other side of the seesaw next year or two, maybe five years, your portfolio can be hit hard,” the CEO said with regards to crypto. “The seesaw aspect you want to be is a kind of inflation-promoting aspect that most people don’t invest in.”

Bitcoin is down 38 percent from its all time high of $64k in April. While the asset has done tremendously well, Richard Bernstein believes that Bitcoin has finally retreated into a bear market.

Chart showing progression of bitcoin from April to June

Bitcoin down 38% from all time high | Source : BTCUSD on TradingView.com

Currently, Bernstein is quite pessimistic about technology stocks, which he made evident in 2019. He does not believe in stocks that are geared towards disrupting the current economy.

Technology stocks have grown a lot in recent years. With most investors portfolios containing a reasonable amount of technology stocks. The stocks have also shown tremendous growth. Disruption is a word that gets thrown around a lot in the technology sector. But Bernstein still is not impressed by them, calling the tech sector a cyclical sector back in 2017.

Regarding inflation, he predicted that inflation will definitely shock investors. “A huge miss on inflation but everybody thinks it’s just temporary,” was a statement he made in regards to economists saying that this is just transitory. But he hopes that the tide will turn at some point.

Featured image by Luv Murrell - Unsplash, chart from TradingView.com