Introduction
Welcome to the BaconDAO Daily Digest! In this issue we will be covering Bitcoin updates, Binance Smart Chain, Polkadot news and more! If you like this content and want up-to-date news and gem picks, join the BaconDAO Discord.
Bitcoin Update
Bitcoin Analysis by Virtual Bacon
Case study on Open interest, long/short accounts ratio, and funding rate, in order to spot when market is in continuation or reversal with a squeeze pending.
From top to bottom we have price, long/shorts accounts ratio, open interest, and funding rate.
First observe the blue line period:
- Price was making higher highs, showing a uptrend.
- Open interest was going up: meaning new futures positions are being opened (This can be longs or shorts).
- Long/Shorts accounts ratio was going up slightly: this means most of the futures positions are still in the same accounts. Big players are still holding their positions, so are retail.
- Funding rate was going up: this means overall traders favour longing in the futures market, driving futures price above spot price.
Next observe the white line period:
- Price still making higher highs
- Open interest still going up: new positions are being opened.
- HOWEVER, Funding rate going down: overall traders are losing faith in the rally, and the total buying power is diminishing. Futures price is falling back down towards spot price.
- AND, Long/Shorts accounts ratio is going up: even though total buying power is decreasing, the number of accounts who are long is actually increasing. This means big players are reducing their positions, while small retail investors are picking up the bags.
Retail investors are typically the losing traders, and we want to trade against them. And this signalled the top, funding continued to drop after, and so did price.
Lastly let’s look at the current consolidation period in red.
- Price sideways
- Open interest going up big: lots of new futures positions are being opened (can be long and short)
- Funding rate going up: Total buying interest is increasing, this includes big players and retail
- Long/Short accounts ratio going sideways: Around the same number of accounts are long and short.
Combining funding rate and long/shorts accounts ratio, we see a divergent behaviour:
Even though we are getting more total buying power in the futures market, the number of buyers and sellers remain at the same ratio. This means the buyers are the smart money who are buying with large amounts, while the sellers are retail and selling with smaller amounts.
This is the Short Squeeze scenario I described.
In summary, these charts show that:
- More Positions are being opened in futures market.
- These positions sum up to more buying than selling in terms of dollar amount.
- These positions have around the same number of accounts who are long and short.
- Longs are large accounts representing smart money.
- Shorts are small accounts representing retail.
- Shorts (retail) will likely lose money and price go up. This can be in the form of shorts getting squeezed, or retail fomoing in late by opening late longs. The results should show up the same way on the charts.
Token Sales & Catalyst Events
Low Cap Updates
Low Cap updates by Luke.
This is the Low Cap updates section of the Daily Digest! First we’ll be covering Bitcoin dominance and then going into the Low Cap news for today.
BTC.D Analysis
Weekly:
On the weekly, after the bounce from the weekly support, BTC.D slowed down as it approached the weekly trendline. These next two weekly candles will decide the fate of BTC.D. BTC.D will likely challenge the trend resistance and break through, or BTC.D may continue to follow the descending wedge and challenge both the resistance and support.
Daily:
On the daily, BTC.D has made its first bullish close since rejecting from the weekly resistance. Now at the bottom of a support range, BTC.D has made a weak bounce, as alts continue to rally. BTC.D will likely falter and continue to break down, as it continues its downward trajectory. The weekly support at 45.3% will likely hold, in the short term.
4 Hour:
On the 4 hour, BTC.D seems weak, after its bounce from support. With Bitcoin now entering a safer range, alts will continue to shine, as more liquidity moves their way. As a result, BTC.D will likely break the support zone, and head down to the weekly support (45.3%). When BTC.D meets the weekly support, we can then judge which way BTC.D is more likely to head.
Conclusion
Now that Bitcoin is starting to rally away from its lows, alts will start to see more liquidity move their way. In the short term, BTC.D seems like it will continue to break down, as alts continue to outperform. This will likely not change until BTC.D meets the weekly support around 45.3%. The mid-term favors the bulls, as the weekly support will likely hold. However, alts may continue to shine, if the weekly support doesn’t hold.
I’ll continue to hold my alts, as BTC.D looks like it will continue to break down in the short term.
News
Collateral is making its way to Polygon!
A thread on Yield Guild Games
A thread on Solana’s new stake pools
Binance Smart Chain (BSC)
Binance Smart Chain (BSC) Analysis by Viperr
If you’re new to BSC and want to set up a wallet, check this quick guide HERE. Also, we have a BSC resources document which can be found HERE.
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BSC News & Updates:
Top 10:
Flop 10:
Wault Finance New Pools:
Beefy Finance Presents Moonpot:
New PancakeSwap Pool:
Polkadot News
Equilibrium Crowdloan Update
Moonriver Has Begun Phase 2 Of Its Deployment on Kusama
Karura Dex Article
Ankr To Support Parachain Crowdloans
Polkadot Ecosystem Top Gainers (24h)
Polkadot Ecosystem Top Losers (24h)
Join BaconDAO today for more Analysis and Opportunities!
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Disclaimer
IMPORTANT! DO NOT SKIP!
The following report is EDUCATIONAL RESEARCH MATERIAL.
It is NOT FINANCIAL ADVICE.
VirtualBacon and team is NOT A FINANCIAL ADVISOR.
This report is a summary of our educational research.
It is provided for educational and informational purposes ONLY.
YOU ARE UNDER NO OBLIGATION TO INVEST IN ANYTHING.
BaconDAO does not provide individually tailored investment advice, as we do not understand the readers’ financial situations, investment goals, risk tolerance, etc. All investing decisions should be made under consideration of your own circumstances. We are not responsible for any losses you incur, or profits you make.
Cryptocurrency investing comes with extremely high risk. YOU COULD LOSE ALL OF YOUR MONEY WITHIN A DAY!
If you choose to invest, consider the following advice:
- Do not risk money you cannot afford to lose.
- Perform due-diligence and understand your investments.
- Use common sense.
