So Far Only A Flesh Wound

Ethereum has formed a “golden cross” pattern on the 1-week timeframe, marking the second such signal this year. While the long-term implications could be very positive if history repeats itself, there are reasons to temper expectations. A weekly golden cross has formed | ETHUSD on TradingView.com Ethereum Golden Cross And A Possible Target For New ATHs 1W ETHUSD has formed a golden cross for the second time in 2023. A golden cross is a buy signal in moving average-based trading systems. It suggests that the trend is moving in an upward direction and because trends tend to persist, this is notable. The golden signal occurs when a shorter-term moving average (the 50-week MA) crosses through a longer-term moving average (the 200-week MA) from below. A death cross forms when the opposite happens. Related Reading: This Pattern Points To $10,000+ Ethereum Price, But When? The last confirmed golden cross for Ethereum in December 2020 preceded a massive 600% rally over the next year to the asset’s all-time high near $4,900. A repeat move of similar magnitude this time would put Ethereum above $12,000—over six times today’s price of around $2,000. However, it is important to note that not all golden crosses lead to the anticipated upside. In 2023 alone, 1W ETHUSD has death crossed and golden crossed twice now, demonstrating how moving average-based systems are prone to whipsaw without an established trend to follow. Above 20 on the ADX confirms the trend | ETHUSD on TradingView.com An Uptrend Or More Whipsaw? How The ADX Confirms Trends The whipsawing death cross and golden cross price action on the Ethereum 1-week chart failed to generate follow-through in either direction. So how can we be sure that this isn’t yet another premature crossover? This is where the Average Directional Index (ADX) comes in when gauging the validity of moving average crosses. The ADX aims to measure trend strength, typically on a scale of 0 to 100. Related Reading: Ethereum Price Prediction for 2023, 2024, 2025, 2030 and Beyond As the 1-week ADX edges up from below 20, it confirms growing momentum that reduces the odds of more whipsawing price action. Traders often use such ADX readings to confirm golden/death crosses and enter only the most high-conviction signals. The 1W ETHUSD Average Directional Index isn’t yet above 20, but is approaching this key level. Above it, it gives the golden cross much more validity. Tony is the author of the CoinChartist (VIP) newsletter. Sign up for free. Follow @TonyTheBullBTC & @coinchartist_io on Twitter. Or join the TonyTradesBTC Telegram for daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from Shutterstock, Charts from TradingView.com

The potential approval of a Bitcoin ETF (Exchange Traded Fund) is bound to open new opportunities for traders. The expectations surrounding this event impact the market now, but an expert believes they will have a more substantial effect in the coming months.  Related Reading: Bitcoin Price Alert: $48,000 By Early January, Forecasts Proven Indicator As of this writing, Bitcoin trades at $37,400 with a 1% profit in the last 24 hours. Over the previous week, the cryptocurrency stayed in the green with a 3% profit, holding the critical level of $37,000 despite the increase in selling pressure. The Lucrative Strategy In Anticipation Of Bitcoin ETF Approval As Bitcoin’s value soars with a remarkable 125% increase this year, a new trading strategy emerges, promising high returns in the wake of the anticipated Bitcoin ETF. A seasoned market analyst, Markus Thielen, unveils insights into leveraging the evolving crypto market dynamics for profitable trading in an essay posted by options platform Deribit. Thielen’s analysis reveals an “unusual” trend in the Bitcoin market: despite its significant rally, the 30-day realized volatility remains at a modest 41%, starkly contrasting to the 5-year average of 63%. According to the analyst, this subdued volatility reflects a declining interest in leveraged Bitcoin options, a direct consequence of institutional players entering the crypto arena. These players, holding significant Bitcoin assets, will likely sell volatility, fostering a more stable market environment that mirrors traditional financial markets. In this landscape, the strategy of selling strangles (120% call and 80% put) on a 30-day rolling basis stands out. According to Thielen, this approach has shown profitability in approximately 23% of cases over the past year, as seen in the chart below, marking a significant improvement from the decentralized finance (DeFi) summer’s high-risk profile. At that time, DeFi protocols attracted billions in capital to the crypto ecosystem contributing to the incipient Bitcoin rally. While there are differences in the current market dynamics, options players are likely to benefit from this strategy. This strategy, particularly effective during low-risk periods, suggests a window of opportunity for traders to capitalize on before introducing institutional influence. Institutional Involvement Expected to Stabilize Bitcoin Market The anticipated launch of the Bitcoin ETF is set to transform the market further. This event is expected to recalibrate the put/call ratio, which leans heavily toward calls. Thielen compares it to the S&P 500, where the put/call ratio has been more balanced. The Bitcoin market might soon witness a similar equilibrium, presenting an opportunity for traders to harness volatility through a sell-put strategy. Furthermore, Thielen notes that the post-ETF approval phase could be the last chance for traders to exploit high volatility levels. Once institutional players begin systematically selling volatility, the market is expected to enter a phase of reduced price fluctuations, making volatility-based strategies less effective. The analysis also touches upon Bitcoin’s correlation with broader market indicators like the VIX index. While the Bitcoin market has maintained high volatility relative to the VIX index, this gap is anticipated to narrow, offering traders a strategic edge in timing their trades effectively. Related Reading: Bitcoin Bull Run Is Only Just Starting, According To This Metric In conclusion, as the Bitcoin ETF approaches and institutional participation increases, savvy traders can look towards selling strangles as a strategic approach to capitalize on the current market conditions. Cover image from Unsplash, chart from Deribit and Tradingview

In a bold move, Cosmos co-founder Jae Kwon has called for a significant shift in the blockchain’s direction following the controversial passing of NWV #848. This proposal was approved by the community’s voting mechanism, earning around 40% of the votes, and it was aimed at changing the blockchain’s native token inflation rate. Related Reading: Cosmos (ATOM) Bears Dominate As Bulls Struggle To Drive Price Kwon, expressing his dissent, is now advocating for a coordinated “split” in the Cosmos ecosystem, a proposal that could reshape the blockchain’s future. This development comes in response to what Kwon perceives as “deviating from the network’s core principles.” “AtomOne” Split, Cosmos Co-Founder Urges Community Engagement Kwon’s proposal, termed “AtomOne,” is not just a divergence but an exodus from the current state of Cosmos, encouraging community members who voted ‘No’ to join this new venture. The plan is still in its infancy and laid out in a GitHub repository, where Kwon invites community ideas and participation in shaping this new direction. He emphasizes a collaborative approach, urging the community to discuss and contribute to the formation of AtomOne. The essence of AtomOne lies in integrating $ATOM with $ATMO/$ATOM1, aiming to prevent a “complete collapse of ATOM by mass selling.” Kwon suggests that instead of abandoning ATOM altogether, there should be a way for it to coexist with the new fork. Cosmos Community Faces a Crossroads: Exodus And Innovation Kwon’s vision for AtomOne involves forking the current “cosmoshub4” but with its development path and teams, aiming for a more decentralized structure than the current Gaia. This new entity is open to all who opposed the recent vote, signaling a departure from the traditional paths of blockchain governance. Kwon highlights the power of the minority in blockchain ecosystems and the ability to self-organize and create antifragile structures. His message is clear: those who do not align with sound logic are destined to fail, and the future belongs to those who dare to exodus and build a better civilization. Kwon assures that this move isn’t about abandoning the original Cosmos hub but saving it and redefining its role. People are completely confused about the nature of blockchains what power the NO/NWV voters have altogether inside and outside the hub. The reality is that we exist, our principles and goals are aligned because they come from logic and we are about to demonstrate antifragility. The reality is that you cannot take control of a chain even with over 50% consensus, even 67%, because the minority can always self-organize even without your help. And the reality is that those who don’t make decisions based on sound logic always end up failing in the end. As the community gears up for this potential split, Kwon’s call for a departure to AtomOne reflects a pivotal moment in Cosmos’ history and a testament to blockchain governance’s dynamic and evolving nature. A conversation that will continue for “generations.” Related Reading: Cosmos Has A Grand Plan For 2024: Will It Crush Ethereum? As a result of the split proposal, ATOM has seen a spike in volatility, recording an 11% loss over the past few days. However, speculation is that the split will involve an airdrop poised to attract positive attention for the token. Cover image from Unsplash, chart from Tradingview