Select Group of Altcoins Are Set To Explode, Says Crypto Trader Elliot Wainman
Crypto trader and influencer Elliot Wainman says he believes certain sectors of the crypto market are about to erupt.
Wainman tells his 197,000 subscribers on YouTube that he often navigates the crypto markets by finding opportunities when the market is down and most traders are fearful.
“As people started to get too bearish yesterday, I started to get quite bullish. When people were overextended on Bitcoin, I was looking at the altcoins. This is the nature of predicting the next move and being a step ahead of the game. That’s how you don’t just get a little 20%, 30% pump. That’s how you get those Xs and gains.”
The trader also shares a signal that could indicate the time has come for altcoins to outperform Bitcoin.
“People start to think, ‘Well, if Bitcoin’s moving 10%, 20%, then why do I need to be in these riskier altcoins?’ and that’s exactly the mindset that drives everyone out of the alts and makes everyone stop paying attention to the alts. That’s what you want to take advantage of because you have the opportunity to see this next move coming, which in my mind is inevitable.”
“Look at 88mph (MPH). Up 300% against Bitcoin. Injective (INJ) up 60% against Bitcoin on the seven-day [timeframe]. We have THORChain (RUNE) up 33% against Bitcoin. KeeperDAO ROOK, one of my favorites, up 100% against Bitcoin. ChainX (PCX) up 42%. Hegic up 52%. API3 up almost 200% against Bitcoin.
This is where you get these gains even if all you want to do is stack more sats and stack more Bitcoin. You have the opportunity to do that by getting your hands on good alts before they take off, before they go mainstream and before they’re the talk of the town.”
Wainman believes decentralized finance (DeFi) assets will witness the most explosive rallies and says a few of his top picks are the data oracle API3, network optimization protocol Marlin (POND), and the decentralized capital market Allianceblock (ALBT).
Wainman says he’s also bullish on non-fungible tokens (NFTs).
“Altseason is here. Altcoin dominance is growing. We have a subsiding crypto fear and greed index. We have NFTs (non-fungible tokens) absolutely booming which is super exciting for me… Usually, when you hear so many people being super skeptical and you really see the fundamentals, it could be, not always, but it could be an indicator that you’re on to something and that the dividends for this bet will pay out dramatically.
That’s what altcoins have been over the last few months and years. That’s [what] I believe DeFi (decentralized finance) will continue to be as people have written it off as dead since the end of the August boom.”
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- Crypto Trading Strategy: How to Use Funding Rates to Buy the Dip
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- ETH/USD Again Tests 1350: Sally Ho’s Technical Analysis 24 January 2021 ETH
Crypto Trading Strategy: How to Use Funding Rates to Buy the Dip
The cryptocurrency market has entered a new bullish cycle. Following the Black Thursday crash in March 2020, more than $900 billion have flooded the industry. Some of that money has also been following a key crypto trading strategy.
The massive capital influx has been fueled primarily by the havoc that COVID caused on the global economy. And as institutional investors try to hedge against inflation, this new asset class emerged as an alternative to the traditional financial system.
Still, rushing into this booming market isn’t without serious risk. Regardless of current bullish conditions, timing exhaustion points for various tokens is a critical skill.
By anticipating the ideal moment to sell the top and buy the dip, crypto investors and traders can maximize their profits while reducing the risks.
According to Alex Krüger, a renowned technical analyst, timing execution in a bull market can be easy when employing the right strategy. One such strategy gaining traction among traders is looking at perpetual swaps’ funding rates.
As a rule of thumb, favorable funding rates indicate that market speculators are growing optimistic as long traders pay short traders’ funding. Conversely, negative funding rates suggest that investors are leaning bearish and short traders pay funding to long traders.
Krüger maintains that funding rates of 0.1% or higher every eight hours are “unsustainable.” When this happens, market participants have entered a state of euphoria, leading to steep corrections.
He advises investors to take partial profits or refrain from opening long positions when funding rates are high due to this signal’s strength in identifying a local top.
However, when perpetual swaps’ funding rates hover around 0.01% or lower every eight hours, it can be considered a positive sign. Krüger believes that investors must employ technical analysis alongside flat to negative funding rates to buy the dip.
“When perpetuals’ funding is flat to negative (negative is best) and/or perpetuals-spot basis is negative, one has a green light for buying. Stagger orders if unsure about the level,” said Krüger.
When looking at Bitcoin perpetual swaps’ funding rates over the past week, Krüger’s thesis holds.
On Jan. 19, BTC was trading at a high of nearly $38,000 when its funding rate on BitMEX peaked at a high of 0.102%. Since long traders were funding short traders, a sell signal developed.
What came next was a 24% correction that pushed Bitcoin’s market value below $29,000.
Following the massive bearish impulse, Bitcoin perpetual swaps’ funding rate on BitMEX dropped to -0.019%. As short traders were funding long traders, the market was signaling that it was time to buy the dip.
Subsequently, BTC’s price rebounded by more than 17% towards the $34,000 mark.
Ethereum appears to have had a similar price reaction to its perpetual swaps’ funding rate over the past week.
After Ether’s price rose to a new all-time high of over $1,440 on Jan. 19, its funding rate on BitMEX skyrocketed to 0.53%. Such an elevated rate was a concerning sign for those trading this altcoin since it suggested a high probability of a market top.
Indeed, ETH reached exhaustion in its uptrend and quickly lost over $400 in market value.
It was not until Jan. 22 that Ethereum’s funding rate on BitMEX dropped to 0.01%, indicating that it was time to buy the dip.
Sidelined investors who could take advantage of the bullish signal to reenter the market could have profited thanks to this strategy. Since then, Ether’s market value has risen by more than 33% to make a new all-time high of $1,480.
Digital assets analytics firm ViewBase provides a free-to-use tool for traders to use this crypto trading strategy of the top 60 cryptocurrencies by market capitalization across multiple futures exchanges.
Based on the data collected from this platform, Theta Network (THETA) could be presenting an opportunity for investors to buy the dip since its funding rate is currently negative across the board. For instance, THETA’s funding rate is hovering at -0.0007% on Binance, -0.0384 on FTX, and -0.0100% on OKEx. On Huobi, it sits at roughly -0.125%.
If this crypto trading strategy proves right, then THETA could be preparing to break out of a symmetrical triangle where its price has been contained over the past month.
By slicing through the pattern’s upper trendline, the odds will drastically increase for a neat 42% upswing towards $3.00.
This target is determined by measuring the distance of the symmetrical triangle’s widest range and adding it to the breakout point.
It is worth noting that a spike in sell orders that pushes Theta below the triangle’s lower trendline will jeopardize the bullish outlook. Falling through the $1.70 support level could be catastrophic for this altcoin as it will likely lead to a downswing to $1.00.
Disclosure: At the time of writing, this author held Bitcoin and Ethereum.
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Bitcoin News Roundup for Jan. 25, 2021 – CRYPTO CRYPTO NEWS
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First Mover: Bitcoin Flushes ‘Weak Hands’ as Ethereum Hits New All-Time High
Last week’s rout in bitcoin market looks like “weak hands” selling out because bidders appeared to materialize whenever prices fell to $30K.
U.S. President Biden is unlikely to raise taxes anywhere close to covering his spending proposals (NYT)
China overtook the U.S. as world’s leading destination for foreign direct investment (WSJ)
Investor demand for the lowest-rated junk bonds pushed yields to record lows; that’s below where 10-year U.S. Treasury-bond yields traded for most of the 1970s, 1980s and 1990s (WSJ)
One-third of staff may work from home permanently post-virus (Bloomberg)
A key executive at Huobi crypto exchange is said to have been taken into custody by Chinese police investigating the over-the-counter trading service (CoinDesk)
Valkyrie digital assets filed an application with the SEC for a bitcoin ETF, joining VanEck in the struggle to win U.S. regulatory approval (CoinDesk)
Wladimir (Vladimir) van der Laan, lead maintainer of Bitcoin Core, the key software underpinning the Bitcoin network, is seeking to move further into the “background” for the sake of decentralizing the project. This move comes following criticism of his decision to pull the Bitcoin white paper from bitcoincore.org after the project received a takedown notice from Craig Wright (CoinDesk)
Crypto exchange Coinbase now has more than $90B of assets on their platform and more than 43M registered users, (CoinDesk)
New Innovation Hub from Bank of International Settlements (the central bank for central banks) is planning a platform for testing central bank digital currencies (CoinDesk)
Early exchange Coinbase plans to offer a secondary market for private shares ahead of public stock listing, as pre-IPO contracts change hands at valuations of more than $70B (The Block)
CNBC stock-picking personality Jim Cramer suggested to the winner of the $731M Powerball jackpot that they should put 5% of their newfound fortune in bitcoin (CoinDesk)
MicroStrategy’s recent sale of $650M of convertible bonds offer “very little downside and an almost-free call option on bitcoin,” writes the son of investing legend Bill Miller of Miller Value Partners (Miller Value Partners)
In an opinion piece, Bloomberg’s senior ETF analyst argues the SEC is long “past due” in approving a bitcoin excjange-traded fund (Bloomberg Opinion)
Crypto Twitter trader and analyst @CryptoCapo_ says the drop in open interest in coin-margined bitcoin-derivatives contracts signals market bottom is in (Daily Hodl)
Ripple/XRP-OCC,SEC,CFTC,BIS,ECB,Gary Gensler-XRP Is A Security-Pymnt Synchronization,Big Bang Theory | Coin Crypto News
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ETH/USD Again Tests 1350: Sally Ho’s Technical Analysis 24 January 2021 ETH
Cryptonzy.com > News > ETH/USD Again Tests 1350: Sally Ho’s Technical Analysis 24 January 2021 ETH
Ethereum (ETH/USD) rallied early in today’s North American session as the pair appreciated to the 1350 area after trading as low as the 1221.66 area during the Asian session, with the intraday low representing a test of a previous technical support level, and the intraday high representing a test of a previous technical resistance level. Chartists note the intraday high also represented a test of the 76.4% retracement of the depreciating range from 1440 to 1039.62. Additionally, chartists note that the recent low was around a couple of technical support levels, including the 23.6% retracement of the appreciating range from 90 to 1350.88, and the 38.2% retracement of the appreciating range from 551.45 to 1350.88. Some Stops were recently elected above the 1256.15, 1307.31, and 1315.02 areas, upside retracement levels related to the recent depreciating range from 1390 to 1039.62. If ETH/USD is able to extend its recent comeback further, some areas of potential technical resistance include the 1477.71, 1582.86, and 1665.31 areas.
During ETH/USD’s recent move higher to multi-year highs, Stops were recently elected above the 1072.78, 1133.44, 1163.93, 1176.28, 1225.30, and 1230.73 areas, and selling pressure intensified below these areas during the pullback. Notably, these levels represented technically significant upside price objectives related to historical buying pressure around the 215.16, 625.01, 370.50, 480.08, 530.32, and 310.79 areas. If the psychologically-important 1000 figure cannot be held, technical traders will eye additional downside retracement areas including the 976.37, 954.16, 941.22, 917.03, 915.48, 902.24, 895.33, 869.22, 860.69, 856.83, 844.44, 831.94, 828.97, 812.73, 783.02, 770.03, 763.66, 750.28, 745.01, and 723.97 areas. Traders are observing that the 50-bar MA (4-hourly) is bullishly indicating above the 100-bar MA (4-hourly) and above the 200-bar MA (4-hourly). Also, the 50-bar MA (hourly) is bearishly indicating below the 200-bar MA (hourly) and above the 100-bar MA (hourly).
Price activity is nearest the 100-bar MA (4-hourly) at 1265.40 and the 200-bar MA (Hourly) at 1263.23.
Technical Support is expected around 792.40/ 766.54/ 729.88 with Stops expected below.
Technical Resistance is expected around 1447.83/ 1477.71/ 1582.86 with Stops expected above.
On 4-Hourly chart, SlowK is Bearishly below SlowD while MACD is Bullishly above MACDAverage.
On 60-minute chart, SlowK is Bearishly below SlowD while MACD is Bullishly above MACDAverage.
Disclaimer: This trading analysis is provided by a third party, and for informational purposes only. It does not reflect the views of Crypto Daily, nor is it intended to be used as legal, tax, investment, or financial advice.