Investment Disclaimer:
- I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
- Past performance presented here is not an indicator of future performance.
- This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.
1. Top 3 Good News for BTC HODLERS !!!
S&P Launches First-Ever Crypto Indices for Bitcoin and Ethereum: Why It Matters
Statistic as of 2021-05-09 04:06 AM EDT: 49 positive votes, 0 negative vote
S&P Dow Jones Indices, one of the world’s largest index providers, launched a new series of digital asset benchmarks. Dubbed the S&P Digital Market Indices, the series includes the S&P Bitcoin Index, Ethereum Index, and Cryptocurrency MegaCap Index. Each of these indices will track the performance of Bitcoin and Ethereum, with the latter tracking a […]
(Extracted from CryptoPanic)
Institutions Bought Another $620M Worth of Bitcoin as Miners Refuse to Sell: Analysis
Statistic as of 2021-05-09 04:06 AM EDT: 49 positive votes, 0 negative vote
Institutional investors have bought another $620M worth of bitcoin, while miners refuse to sell their coins - is the asset preparing for lift-off?
(Extracted from CryptoPanic)
Number of Institutional Bitcoin Wallets with 100-1,000 Coins Resumes Growth: Glassnode
Statistic as of 2021-05-09 04:06 AM EDT: 16 positive votes, 0 negative vote
Data from Glassnode shows that number of Bitcoin wallets held by financial institutions has resumed growing.
(Extracted from CryptoPanic)
2. How Bitcoin Performs Relative to Other Cryptos ?
As of 09 May 2021, Bitcoin has made a cumulative return of 818.16% since Jan 2020 and 200.86% since Jan 2021. It is currently the 14th greatest performing crypto asset since Jan 2021 as compared to the other cryptocurrencies presented above.
3. Technical Analysis on Bitcoin
3.1. Volume Weighted Average Price (VWAP)
VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when BTC is closed at the end of every single day.
Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of BTC (blue line) to fall to its average level (orange line).
Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of BTC (blue line) to rise to its average level (orange line).
As of 09 May 2021, VWAP is suggesting that BTC is trading higher than its average price range of USD 56,000 to USD 57,000.
3.2. Moving Average Convergence Divergence (MACD)
MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).
MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of BTC closing price from its 12-day EMA.
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26).
As MACD (12, 26) goes higher away from Signal (9), it signifies that BTC is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that BTC is losing momentum.
As of 09 May 2021, MACD is suggesting that BTC has been gaining momentum.
3.3. Bollinger Band
Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:
- SMA (20) (blue line), which is the 20-day simple moving average price of BTC
- Upper Band (orange line), which is computed by adding 2 standard deviations of BTC on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of BTC from SMA (20)
- Close (green line), which is the daily closing price of BTC
Whenever close line (green) touches the lower band (red), it indicates that BTC is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that BTC is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity.
As of 09 May 2021, Bollinger Band is suggesting that BTC is trading at its fair value (i.e. neither overbought nor oversold).
3.4. Relative Strength Index (RSI)
Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that BTC is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that BTC is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity.
As of 09 May 2021, RSI is suggesting that BTC is trading at its fair value (i.e. neither overbought nor oversold).
Based on the technical analysis presented above, quantdoge holds a neutral stance on the short-term price outlook of Bitcoin, but I could be wrong, hence please make your careful due diligence before making any financial decision.
4. Bitcoin Risk Profile
Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Bitcoin defined above, BTC seems to trade at a lower risk level on 09 May 2021 as compared to 10 days before on 30 Apr 2021, with its biggest pullback being seen at 13.95% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.
5. Price Simulation for Bitcoin
How did quantdoge simulation perform vs the actual BTC price movement over the last week ?
Over the last 7 days, BTC has been trading in line with the expected values of quantdoge simulations, indicating that BTC was trading near its fair value over the last week.
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If you are into VeChain (VET) and ChainLink (LINK), I have made similar analysis on them at:
- 4 May 2021 (TUE)- VeChain (VET) Daily Risk Report
- 3 May 2021 (MON)- Chainlink (LINK) Daily Risk Report
If you like my analysis and articles, please follow me at @quantdoge for daily updates.
