First Mover: Bitcoin’s Risk-Reward Ratio Suggests Bull Run Has Plenty of Scope to Continue

PLUS: Bitcoin Breaks Below Short-Term Uptrend, Lower Support Around $50K

Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team - Edited by Lawrence Lewitinn March 23, 2021 Sponsored by     Bitcoin (BTC) -5.6%  $54,766 Ether (ETH)  -5.8%   $1,693 (Price data as of Mar. 23 @11:00 UTC) Good morning. Here's what we're writing about: Market Moves by Omkar Godbole: Bitcoin's Risk-Reward Ratio Suggests Bull Run Has Plenty of Scope to Continue Technician's Take by Damanick Dantes: Bitcoin Breaks Below Short-Term Uptrend, Lower Support Around $50K Check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Lawrence Lewitinn and Emily Parker, at 9 a.m. U.S. Eastern time. Today the show will feature guests: Michael Sonnenshein, CEO of Grayscale Investments William Quigley, co-founder of WAX.io and co-founder of Tether Jacob Cantele, head of product at MetaMask   If you were forwarded this newsletter and would like to receive it, sign up here.  Market Moves by OMKAR GODBOLE Bitcoin's Risk-Reward Ratio Suggests Bull Run Has Plenty of Scope to Continue Despite seeing its biggest drop for a month in the last 24 hours, bitcoin (BTC)'s bull run is likely to continue.   That's the suggestion of blockchain data showing the cryptocurrency is still an attractive bet for existing holders and prospective buyers.   Bitcoin's "reserve risk" metric measures the risk-reward ratio of investment based on long-term holders' confidence relative to the price at any given point of time, and is currently seen at 0.008. That's well short of highs above 0.02 seen during the bull market frenzies of December 2017, December 2013, and June 2011, according to blockchain analytics firm Glassnode.   The low current level suggests confidence is still high relative to the cryptocurrency's price. Essentially, the risk/reward is skewed attractively even after the cryptocurrency's six-fold rally in the past 5.5 months.   "The incentive for long-term holders to sell is still relatively low when compared to past bull markets," Jeff Rose, founder and CEO of Vailshire Capital Management, tweeted Monday. "This metric suggests the current bull market still has a long way to run in terms of price increases."   The bullish signal is consistent with the positive picture painted by other on-chain indicators, such as the market value relative to realized value ratio.   Bitcoin's reserve risk (Source: Glassnode) Bitcoin's latest bull market commenced a year ago after the reserve risk fell into the buy zone (green area) below 0.002. Since then, the cryptocurrency has charted an 11-fold rally.   The risk-reward ratio will be deemed unattractive once the indicator hits the red zone above 0.02.   Reserve risk is calculated by dividing bitcoin's price at any point in time by the "HODL Bank," as detailed by Glassnode, which represents the opportunity cost of holding an asset. "Each day a coin is held, the owner defers the ability to exchange it for its cash value," according to Glassnode.   At press time, bitcoin is trading nearly 1.2% higher on the day at $54,738, having defended support at $53,000 earlier in Tuesday, according to CoinDesk 20 data.   "We have seen roughly under $1 billion in liquidations in the past 24 hours; however, the market continues to hold its $53,000 support," Matthew Dibb, COO, and co-founder of Stack Funds, said. "There is an expectation of a deeper pullback to $47,500 if we confidently close below [the $53,000] level.   --Omkar Godbole   Read the original story here: Bitcoin's Risk-Reward Ratio Suggests Bull Run Has Plenty of Scope to Continue A message from Nexo Your digital assets deserve a savings account in their BEST INTEREST. Leading crypto lender Nexo treats you, your crypto and your fiat to industry-best Crypto & Fiat services, featuring:    * Up to 12% interest on digital assets, paid out daily! * Yields available on BTC, ETH, LTC, BCH, XRP, XLM, EOS, TRX, LINK, BNB, PAXG, USDT, USDC, TUSD, PAX, DAI, HUSD, GBP and EUR. * No minimum or maximum limits on funds deposited, offering infinite opportunities to earn. * #ZeroFees on all transactions. * Military-grade wallet security and top-tier insurance on all custodial assets with SOC 2 Type 2 certified crypto custodian BitGo. Get started at nexo.io Technician's Take by Damanick Dantes Bitcoin Breaks Below Short-Term Uptrend, Lower Support Around $50K Sellers were active during Asia hours, pushing bitcoin (BTC) below intraday trend support. The broader uptrend continues to slow, with lower support around $50,000 and then $42,000. Four-hour BTC chart shows a break of uptrend support with lower support levels (Source: Trading View) BTC is roughly 15% below its March high, after failing to sustain moves above $61,000. Sideways trading over the past few days resulted in a 10% decline from trend line support on the four-hour chart. The relative strength index (RSI) is now oversold on the four-hour chart, which could encourage minor short covering at current levels. Resistance around $58,000 could limit short-term recoveries, especially as the longer-term trend continues to slow, as discussed in earlier posts. "We expect the long-term uptrend to moderate as intermediate-term overbought conditions are absorbed," said Katie Stockton, managing partner of Fairlead Strategies. "Initial support for bitcoin remains near $42,000, far enough below current levels to dictate attention to risk management for long positions." --Damanick Dantes Original story found here: Bitcoin Breaks Below Short-Term Uptrend, Lower Support Around $50K BOLO Be on the look out for these upcoming events: 16:00 UTC (12:00 p.m. EDT): Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen speak to the U.S. House Financial Services Committee: "Virtual Hearing - Oversight of the Treasury Department's and Federal Reserve's Pandemic Response". Watch the hearing live on YouTube and read the committee memorandum here.  Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:   Gainers: XRP (XRP): +2.6% Ethereum Classic (ETC): +1.2%   Losers:  Orchid (OXT): -10.9% 0x (ZRX): -10.0% Algorand (ALGO): -8.7%   The CoinDesk 20 filters from the larger universe of thousands of cryptocurrencies and digital assets to define a core group of 20. These assets constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges. ICYMI In case you missed it, here's this past Friday's episode of "First Mover" on CoinDesk TV:   Peter Brandt's Case for $180K-$200K Bitcoin Price, Crypto Trust Funds, Anti-Money Laundering Popular chartist Peter Brandt reviews new bitcoin charts to show how high BTC may go and why the current bull cycle since the COVID-19 low last March is extraordinary yet orderly. Also, why Osprey Funds CEO Greg King believes trust funds will morph into ETFs, and Siân Jones of XReg Consulting on regulators clarifying that anti-money laundering applies to all forms of crypto. A message from NEM GROUP     Symbol from NEM, the next-generation public blockchain, launched March 15th, marking a milestone in NEM's vision for a new economic and digital system. Boasting enterprise-grade security and programmability, Symbol smooths business friction and increases the flow of data  to supercharge the creation, exchange and protection of assets. NEM Group - comprising NEM Software, NEM Trading, and NEM Ventures - nurtures a strong and healthy ecosystem to shape the development and future of blockchain technology for generations to come. Latest Headlines   Crypto Exchange OKEx Korea to Close as New AML Rules Come Into Force An exchange spokesperson said the new anti-money-laundering regime would make it too tough to continue operating.     Former Top Japanese Regulator Joins Crypto Exchange DeCurret as Advisor Toshihide Endo was commissioner of the Financial Services Agency (FSA) from 2018 to 2020,     John McAfee's Security Guard Pleads Not Guilty to Crypto Fraud Charges Jimmy Gale Watson Jr. was indicted alongside his controversial tech entrepreneur boss earlier this month. A message from CoinDesk.tv Introducing Community Crypto, an intimate look at digital transformation   From the world leader in crypto news and events, the all-new CoinDesk TV covers the rapidly evolving world of digital finance and its role in the global economy. On Community Crypto, "Bitcoin and Black America" author Isaiah Jackson explores how crypto is creating and impacting communities. Jackson will organize virtual meetups in the U.S. and around the world, then dive deeper into key themes, issues or questions that arise.   Watch Community Crypto Thursdays at 5 p.m. ET on YouTube or CoinDesk.com. Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.  ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. 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