Dear Teroxx Community,
This week we saw a crypto-market that showed little volatility and therefore little change.
Weekly overview
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Latest crypto news
The premium on the futures and the long/short ratio show that many traders are now bullish on Bitcoin. For professional traders, the implied volatility is commonly known as the fear index, as it measures the average premium paid in the options market. Any unexpected significant movement (negative or positive) leads to a sharp rise in this indicator. 3-month options have recently reached their lowest level in seventeen months. If volatility is very low over a longer period, the probability of a stronger market breakout in the near future increases.
A report by the major US crypto exchange Kraken has listed these indications that the correlation between Bitcoin (BTC), the greenback and traditional markets continues to decline. The report attributes BTC’s dollar divergence to declining growth rates and to the Federal Reserve’s plan to keep interest rates at zero percent until at least 2023. Meanwhile, Bitcoin has shown a positive correlation with the euro since May.
The report states that although the correlation between the BTC and the S&P 500 had reached an 8-month low at the beginning of the month, it was still too low for the S&P 500. However, the correlation later increased again as both markets consolidated.
Bitcoin’s correlation with gold has remained positive since mid-July.
The German Energy Agency (DENA) is the most important government authority for energy innovation in Germany and aims to decentralise its energy ecosystem.
DENA “has selected Energy Web and, in partnership with more than 20 industry players, intends to design and build a digital register of Distributed Energy Resources (DERs) across the country: “The project will enable energy installations in Germany, such as thermostats, solar PV systems, batteries and charging stations for electric vehicles, to automatically register themselves in a decentralised identity register so that they can be used by the German power grid for such purposes as virtual power plants and frequency control”.
Technical term of the week
Cold Wallet: Refers to a wallet that is not connected to the Internet. Here, the digital assets held in custody cannot be directly exchanged, traded or even issued. For this reason, funds on cold wallets are always safe as long as you are the only one who has access to the wallet.
Crypto Market
The market was unable to make any significant moves this week. Due to the high levels of the crypto currencies over the year, any bullish breakout is associated with positive fundamental news or world market movements.
Bitcoin formed a local high at ~$11,700 earlier in the week but failed to maintain this level and subsequently formed support at ~$11,300.
The week was therefore predominantly sideways. As a result, the positions we held were somewhat smaller as there was no clear trend. The weekend was also low volume without increased volatility, which allowed us to hold the “high” prices in the crypto currencies. This shows the current strength of the market and is a positive aspect!
Bullish outlook: If $11,500 could be breached, $12,000 would be a hard resistance. If the financial markets rise this week, digital assets will most likely follow.
Bearish outlook: Due to the low volatility, last week’s bearish outlook is still relevant: a loss of $11,000 and sell-offs to support at $10,500 could tip the positive market sentiment and create a large selling situation.
