Bitcoin hovering above the 3k zone, second highest volume day of the year (2018) – Volatility is back baby!
Massive volume has come into the market today – yuge volume. And I think that is the single most important indicator to pay attention to here.
In yesterday’s article, I discussed the importance of high and low volume nodes using Volume-At-Price analysis (VAP). If you note, the particular zones that were the next high volume nodes are the exact nodes that Bitcoin has been trading in. Now, the volume here itself is pretty amazing. And I’ll take the price chart off the screen so we only see volume – the vertical line represents the beginning of the year.
Yesterday’s volume (depending on the exchange data) ranked between the 3rd to 6th highest volume day of 2018, and certainly the highest volume of the past 9 months. Then we look at today’s volume and were currently sitting at 60,000 – and there’s still 3 hours left before the daily candle closes. If we look at the average daily volume at the beginning of November and compare it to today, it’s 15x higher. That’s pretty significant. The chart below show is a 5-minute chart of Bitcoin that starts at 1900 CST on November 18th and goes to now (1600 CST). There appears to be a fairly even distribution on the way down with some notable high and low volume nodes – but the present value area at 4300 is current painting the highest amount of volume traded at a particular price. And the buying volume is slowly creeping higher and higher. But this is also the same support zone I was talking about yesterday where I expected to see some bigger move higher.
I personally injected my reserve capital into the market when it tagged the 4400 value area – I strongly anticipate a big bounce from this zone within the next week.
Naughty naughty Tether and Bitfinex
There are bad actors in our market – to many to count it seems. But none is as bad as that evil exchange Bitfinex and that horrid scam known as Tether. I wrote about this back on October 15th. To add fuel to the fire of the falling Bitcoin prices, some of the more ‘internal’ woes that are focused mainly by those involved in the cryptocurrency environment have been picked up by major traditional financial news agencies. Bloomberg reported that the United States Justice Department is investing the entities that own/manage both Tether and Bitfinex. Tether is a ‘stablecoin’. Stablecoins, like Tether, represent a source of fiat value. In other words, 1 Tether = 1 US Dollar. Stablecoins claim to have an equal amount of Dollars for each coin in circulation. While most stablecoins have open and transparent accounting practices, Tether does not. Bitfinex is one the highest volume cryptocurrency exchanges and one of the major cryptocurrency exchanges that allow shorting Bitcoin. But concerns have been raised since before 2018 about whether Tether and Bitfinex’s managers had a hand in manipulating the price of Bitcoin – and that is the crux of the investigation the Justice Department is taking. And it appears evident that this is a fear other exchanges have noticed and have been hedging against and planning for. Major exchanges like Binance and OKex have added a number of more reputable and transparent stablecoins to their platforms, probably so their customers have a place to flee if Tether becomes defunt and like to sit in ‘cash’.
And let’s be honest – if you have to base your companies in the Carribbean, you’re probably not out there to provide openness and transparrency. Hell, if Well Fargo gives you the boot and you can’t even find an honest bank to hold your monopoly money, you probably deserve to get caught.
Also, once everyone realises that Tether is going to go to zero in a flash – watch for a major flash pump higher in Bitcoin, Ethereum and everyother crypto on the planet. It will be insane.