crypto summary 22.02

Bitcoin futures open interest nears record high

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We have brought together the past week’s most exciting events in this Good Crypto digest. If you want these updates as soon as we post them, follow us on Twitter.

quick weekly news

Bitcoin futures open interest nears record high

Bitcoin futures open interest has surged close to a concerning $24 billion, prompting apprehension among traders following a sharp market sell-off. However, the current market composition, dominated by institutional investors with stricter risk management practices compared to 2021’s retail-driven surge, suggests a lower risk.

While the premium on fixed-month futures indicates some bullish sentiment, the absence of similar enthusiasm in perpetual contracts suggests overall leverage remains moderate. Additionally, the recent price drop triggered only moderate long position liquidations, further alleviating concerns about excessive leverage.

Overall, there is no imminent threat of a sharp correction triggered by leveraged long liquidations. However, continued monitoring of market indicators like open interest and funding rates remains crucial for identifying potential risks in the future.

Oxford economist predicts “Quantum Economics” as the next big thing

David Orrell, an Oxford-educated economist and author, believes the future of economics lies in quantum mechanics. He argues that classical economic models, based on binary mathematics, lack the depth to accurately represent the complexities of the real economy.

Orrell proposes using quantum-based models, which incorporate the unique properties of qubits, to capture the inherent uncertainty and interconnectedness within economic systems. These models, he suggests, hold the potential to unlock a new level of understanding and predictive power in economic analysis.

Despite the potential benefits, Orrell acknowledges the challenge of raising awareness and overcoming the initial hurdles of adopting this novel approach. He has actively promoted the field through his writings and the establishment of a dedicated scientific journal, aiming to bridge the gap between theory and mainstream application.

crypto industry pushes back against proposed AML bill

The Chamber of Digital Commerce, a crypto advocacy group, is urging the Senate Banking Committee to reject the DAAMLA. They argue the bill, proposed by Senators Elizabeth Warren and Sherrod Brown, would stifle the US crypto industry and harm the economy.

The CDC claims the bill’s compliance requirements are impractical and unrealistic, comparing it to expecting an ink manufacturer to track every person who has ever handled a dollar bill. They believe the legislation would drive crypto businesses overseas, threatening US national security and economic competitiveness.

This opposition echoes concerns from the Blockchain Association, which previously highlighted the strategic advantages of digital assets for the US. Senator Warren, a vocal critic of crypto, introduced the DAAMLA in July 2023, aiming to curb illicit activities like money laundering and terrorist financing.

Tether remains silent on Tron support after Circle’s exit

Tether, the leading stablecoin issuer, has remained tight-lipped about its future plans on the Tron network following Circle’s decision to abandon it. While acknowledging their ability to freeze transactions on supported blockchains, Tether offered no confirmation or denial regarding potential withdrawal from Tron.

This comes amidst concerns about Tron’s safety, with a UN report highlighting its alleged involvement in cybercrime and money laundering. Tether, however, refutes these claims, emphasizing their track record of cooperation with law enforcement and freezing illicit funds.

Despite the controversy, Tron remains home to over half of all issued USDT tokens, highlighting its significance within the Tether ecosystem. The silence from Tether leaves the future of their relationship with Tron uncertain, potentially impacting billions of dollars in USDT holdings.

Bollinger Bands breakout trading strategy

Bollinger Bands trading strategy

🏄‍♀️ Looking to ride the waves of market volatility? The Bollinger Band breakout trading strategy is your ticket to harnessing breakout opportunities like a pro.

Now picture this: when market activity tightens, the Bollinger Bands contract, hinting at an impending surge. But it’s not about diving in at the first sign of movement. Savvy traders hold out for a minimum of three (!) consecutive candle closures above the upper Bollinger Band to confirm a bullish breakout, signaling the green light for potential profits.

👐 In short, we can describe the strategy as follows:

  1. Spot the squeeze: Look for narrowing Bollinger Bands, signaling low volatility.
  2. Wait for the breakout: Enter a long trade only after 3+ candles close above the upper Bollinger Band.
  3. Set your stop loss: Place it below the 20-day SMA for risk management.
  4. Take profit: Exit when the price breaks below the 20-day SMA or when you’re happy with the gains.

🔍 Looking to level up your trading skills? Check out our guide where we’ve unpacked not just one, but two effective trading strategies centered around Bollinger Bands, along with essential fundamentals.

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February 22, 2024

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