Bitcoin Bear Market Will Likely Continue Due to Low Transaction Volume, Analyst Argues

  • Market analyst Willy Woo predicts bearish crypto market trend to continue.
  • On-chain transaction volume is not enough to start a bull run, based on Woo’s NVT ratio.

Bitcoin’s (BTC) price has dropped by over 80% last year, and the value of other major cryptocurrencies has declined by as much as 99% (in some cases). According to some analysts, the digital asset market could now be ripe for a bullish run.

Willy Woo, a prominent researcher and cryptoasset analyst, recently noted via Twitter that on-chain digital currency transaction volumes were too low for prices to recover anytime soon. Woo, who accurately predicted in late May 2018 that bitcoin’s price would drop below $6,000 before showing any signs of recovery, has now argued that high levels of volatility in recent weeks could have led to the surge in on-chain volume of cryptocurrencies.

Drop From $6K To $3K Not A Sign Of Accumulation
Assessing market conditions via a tweet, Woo wrote that the “initial volume spike false signalled a faster detox and an earlier end to the bear market.” In rality, he added, it was a side effect of volatility, and the “move from $6k to $3k created immense trade volume, but it was in no way a signal that accumulation volume had begun.”

Woo also observed:

Going on to explain price movements in the cryptocurrency market, Woo mentioned that the Network Value to Transactions (NVT) ratio (a metric he developed) was currently on the higher side. This, according to the Exodus wallet advisor, means the value of on-chain transactions is considerably lower than the valuation of the network.

Bear Market Could Last Until Second Half Of 2019
The NVT ratio is used to estimate the intrinsic value of cryptoassets, which helps investors determine when the price of bitcoin and other digital currencies is too low or too high. Commenting on how the effects of the recent spike in volume caused by high levels of volatility has now subsided, Woo noted:

That volume has since subsided. Leaving the NVT chart on the high side of its oscillation around the main move downwards. The key thing here, in my interpretation, is it’s on the high side of its band, so I think an up move is limited, bears will win the longer term trade.

In November 2018, Woo also predicted that a bearish trend in the crypto market would continue, arguing that downward pressure on bitcoin could last until the second half of this year. He referenced data from NVTS, which he observed had dropped below its support levels. Last year, Woo had said BTC’s price would likely not be able to break past its 200-day Moving Average (MA).

He predicted (in November 2018):

If price (in the short term) bounces upwards here, which is certainly possible, I think the 200 day moving average is the upper band of the move. This is ~$7k right now. Remember if the price goes above the 200 DMA, in the history of BTCUSD’s 8-year trade history, it’s been a reliable indicator of a bear to bull transitions. It’s too early to transition out of the bear.

Bitcoin is trading at $3,859. according to CryptoCompare data, after recording an intraday high of around $3,972. The cryptocurrency market capitalization stands at just above $130 billion at press time.


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Author: Omar Faridi
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Augur Accurately Predicts 2018 US Elections

The blockchain-based prediction market Augur, whose native token REP is ranked #48 with a market cap of USD 163 million as of 7 November 2018, accurately predicted the 6 November United States elections. During the morning of the election, before any polls closed, Augur predicted a 74% chance that Democrats would take the House, and a 90% chance that Republicans would take the Senate.

After President Trump’s declaration hours ago of a “Big Victory” after the Repulicans won the Senate, Augur’s predictions have now been confirmed as fact.

There were USD 1.366 million of bets at stake on the ‘Which party will control the House after 2018 US Midterm Election?‘ prediction market. This represented 48.5% of the USD 2.804 million of money at stake across all of Augur’s prediction markets. Even though the House has been confirmed as a win for the Democrats, the odds for the Democrats winning sits at 97%, leaving a 3% spread that investors can easily profit on, so money continues to pour into the contract. However, the prediction market will not be closing out and disbursing funds until 10 December 2018, so users will have to wait for their profits.

The Augur prediction market for the Senate has much less money at stake, just over USD 10,000, likely since pollsters agreed that it was nearly certain the Republicans would win the Senate. Thus, less money is staked on Augur prediction markets where outcomes are more certain.

Based on data collected by The Block Crypto, it seems that Augur’s election predictions are a reflection of forecasts by expert pollsters like FiveThirtyEight. As FiveThirtyEight adjusted its forecast for the House during election night, the Augur prediction market followed in lockstep.

The prediction markets for the 2020 United States Presidential election have already begun, with just over USD 5,000 staked on the market for whether Donald Trump will be re-elected. Currently, Augur thinks Trump only has a 36% chance.

Aside from political election predictions, the biggest markets on Augur are for cryptocurrency price forecasts. USD 552,000 is staked on whether Ethereum will be USD 500 or more at the end of 2018, USD 103,000 is staked on whether Ethereum will exceed USD 1,000 at the end of 2018, USD 279,000 is staked on whether the REP token will exceed USD 32 at the end of 2018, and USD 39,000 is staked on whether Bitcoin will exceed USD 20,000 at the end of 2018. Due to the continued cryptocurrency bear market, Augur is predicting that most of these questions will verify as false. When aggregated, the Augur markets for cryptocurrency price forecasts have about USD 1 million at stake.


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Author: Zachary
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