Bitcoin commentary
In-depth insights into the bitcoin market. Darren Chu, Founder of Tradable Patterns, shares his technical analysis on market movements, as well as exchange updates.

Bitcoin (BTC/USD) Continues Consolidating Near 35k
January 19
  • Bitcoin (BTC/USD) exhibited a wide trading range this past week, bouncing off the psychologically key 30k whole figure level. BTC/USD has steepened in its rally since the break above the prior record high of 20k, with BTC/USD now having reached a target of 40k based on the height of the prior rally to 20k tacked onto the point of breakout at the same level.
  • BTC/USD appeared to be potentially vulnerable to a slide back to the steep upchannel support that has held for roughly 2 months on the weekly chart. The monthly and weekly RSI, stochastics and MACD were rallying or consolidating recent gains, with the daily equivalents trying to turn lower.
  • The crypto universe hit over USD 1T in market cap for the first time on January 7.
  • In another clear sign of institutional interest, Morgan Stanley disclosed through a January 8 SEC filing it had accumulated 10.9% of the shares of MicroStrategy.
  • Bitcoin's hashrate was back to near its record high.
  • BTC has seen a 21% drop in centralized crypto exchange deposits since the mid-March peak.
  • The number of DeFi users (as defined by unique wallet addresses) has exceeded 1.2M as of Jan 17.
  • As of mid-Jan 2021, 2 DeFi tokens have reached the top 20 coins by market cap, and the total value locked in DeFi has exceeded 22B.
  • Capital continued flocking to Grayscale's GBTC, with Grayscale acquiring 34.6k BTC late December, and 9.8k BTC added since the new year.  Institutional investors participated meaningfully in 4Q20, with 93% of capital inflows to Grayscale’s products coming from this segment of investors. 
  • The correlation between BTC/USD and the S&P 500 was returning to historically high levels, with any correction in the S&P 500 in the next week bearing close monitoring.
  • Devaluation pressures on the U.S. dollar continued with the incoming Biden administration's Jan 14 announcement of a further USD 1.9T in fresh U.S. government stimulus.
  • The U.S. Federal Reserve’s balance sheet peaked June 9, and after falling for a few months, has firmed and is at a fresh record high.
  • Interestingly, just as the U.S. Dollar Index was showing early signs of stabilizing as it approached its 2018 low, BTC/USD's correlation to the U.S. Dollar Index was trying to bottom and become less negative in coming months.
  • BTC/USD's correlation with gold was trying to bounce from near its most negative level in 5 years, potentially to become less negative in the next few months.
Monthly BTC Index

Weekly BTC Index

Daily Bakkt BTC Future

Weekly Correlation BTC Index vs. S&P 500 - set to 20 period

Weekly Correlation BTC Index vs. Gold Spot - set to 20 period

Weekly Correlation BTC Index vs. USDX - set to 20 period

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